The thought is that putting IT in the cloud is less hassle for the politicians because IT departments are often seen as a culture of "NO" (kind of like Republicans, right?). In addition the project manager is more likely to have greater control over the outsourced entity than he is his own internal employees. No change managment, not as much paperwork, etc...just do what I say or you won't get paid. Can't do that to an employee as easily.
It almost seems like this is more about power consolidation, and squeezing even more out of the bottom line. Last I checked the most efficient businesses use highly developed processes which rely entirely on IT and technology to function. A word to the C level; when your IT staff of one is waiting to speak to someone in India because your business critical app shit the bed maybe you'll rethink this cloud thing.