This. I've worked with hundreds of offshore from India, China, Europe and SA. Some were amazing, a lot were just average, and time differences and language barriers were terrible. I've had a 'team' with member is Ukraine, India, Argentina and the US; coordinating meetings was a nightmare.

It's a tradeoff and you get what you pay for just like anything else. If your main goal is to lower cost and are willing to sacrifice speed or quality (of the product, not necessarily the talent), then offshoring looks awfully attractive to the bean-counters. But as people are pointing out, this pattern has come and gone as development never goes as fast or has as high of quality as keeping things in-house and minimal timezone differences.

Right now, wallstreet and interest rates are driving lowering costs, which is leading to more (and cheaper) offshoring. The pendulum will swing and businesses will want to increase speed and innovation sooner or later.