Growth with outsourcing is not a myth it works for corporate as you said in your lines. Industry needs people who are employable and work for a moderate wage which is only possible through outsourcing. Same can be achieved with locals if locals are willing to work for moderate wage. Business needs to make profits otherwise they just vanish there is no easy way for them.
If I have to start a business with $1 million I will always like to keep my operational cost as low as possible so that I can invest more money on core business. If I need 4 skilled dev/testers to keep my business operational if I have topay $100k each I almost loose 40% of my principal to operation expenses if I outsource my operation expense I can definitely save on operational cost. If my business is not successful and if operation cost is low I will not loose much as I can always sell my core business and minimize my loss. This is the exact case where H1b/Outsourcing to offshore/nearshore works for corporate.
Success or failure is a common thing and no body pays for a failed product so corporate have to find a way to recover the loss in some way this is the exact scenario where lowering the production and operational costs will be effective. We cannot ask corporate to be bankrupt to satisfy our emotions.