First off there is a difference between Outsourcing, and Offshoring, which is what I think you are really referring to. Secondly I have yet to find a country where you can higher a programmer for $4160/year ($2/hr * 40 hours * 52 weeks). Yes I know this is 1) The internet, and 2) Slashdot, and 3) I am replying to an AC, but hyperbole just makes it easier to dismiss what you say.
Like everything, there are upsides and downsides to both Outsourcing, and Offshoring. I am a consultant, which means that every single one of my clients has decided to outsource some or all of their work. However because I am domestic, that makes it OK?
It is far better to ask why are they outsourcing? I once worked with a company that decided to move QA to india. The reason had nothing to do with cost savings, but had everything to do with having two teams 12.5 hours apart (well sometimes 13.5, daylight savings). The point wasn't cost savings by offshoring, but to streamline development, and for them it worked. If you look at the world of VisualFX, many of the larger companies are setting up divisions all around the globe so they can have work the "follows the sun".
And then there are companies that do it for the wrong reasons. The think it will save them money, and it can, though not as much as you seem to think (or likely the people whose kneejerk reaction got you to a 5, Insightful at the time of writing this). If you just throw work over the fence, don't provide oversight, don't show that you care, then you are going to get the horror stories you hear about. I've seen that reality too, I have been paid a lot to fix messes like that.
You can outsource and/or offshore for the right reasons, or the wrong reasons. It can be a boon, or it can be disastrous. There are no universal absolutes here. The term you used is too big, too general, and you too — seemingly — misinformed to make a blanket good/bad statement.
Also how would "outsourcing" be a result of technology betraying you? Technology is a tool. Tools don't have to assure you a standard of living, that is a societies job.