In the latest issue of Foreign Affairs, Daniel Drezner writes an excellent article called The Outsourcing Bogeyman, which ought to be required reading for everyone interested in the subject (especially if combined with Wired’s on-the-ground version of the same topic.)
Favorite quote: “[..] believing that offshore outsourcing causes unemployment is the economic equivalent of believing that the sun revolves around the earth: intuitively compelling but clearly wrong.”
As usual, the problem is political – the reaction rather than the action.