James McGovern is a little over the top in his title for the linked post, but I think he touches on a good point with this anecdote:
My friends thesis was based on the fact that the enterprises who go down the outsourcing route tend to lower their expectations for individual consultant productivity when pursuing outsourcing arrangements. He stated once an American company has failed at attempting outsourcing to India, he gets to come in and pick up the pieces at a higher rate. He also mentioned that this allowed his 100% US firm to staff a lot lower on the food chain that prior to outsourcing. Clients generally don't do individual interviews anymore which has afforded him the ability to place less optimal resources on projects. In the past, he worked for one of the spinoffs from the big four consulting firms who had the notion of partner. While the partner would bill out at higher rates, they wouldn't necessarily bill 100% of their time to a client. He noted that the Indian outsourcing model had the same notion of a partner only that they stayed at a single client to work on relationship-oriented issues. He believes this is another opportunity for him to take folks who are losing their technical ability to not only make them billable but to do so at extreme rates.
I'd disagree that you can get away with sending sub-standard consultants in at high rates for any period of time. Clients will notice, and that will be that. On the other hand, the offshoring experience may well lower expectations, and James touches on that with this: "He noted that the Indian outsourcing model had the same notion of a partner only that they stayed at a single client to work on relationship-oriented issues." When the consultants are 12 timezones away, that's probably most of what gets done. There's not going to be any direct technical collaboration, nor is there going to be any communication between the developers and the end users. It's a complete return to the 1970's glass house of IT approach: toss the requirements over a wall, wait N months, and see what comes back.
That approach didn't work well back then, and I see no reason for it to work well now.