Let's not fall into the trap of arguing on the basis of a false dichotomy. If you can find talent in Chicago, Portland, Seattle, Austin, and Raleigh, you ought to hire them. If you can find talent in Toronto and Vancouver, you ought to hire us too.
There is no false dichotomy. The connotation of "off-shoring" is that the purpose is to reduce costs because median wages are an order of magnitude lower in third world countries. Costs aren't reduced if you've still got to pay people middle-class first-world wages.
I agree with you though. Talented developers are a scarce resource and can command high wages wherever they are located. Developers aren't like factory workers, they need a high level of education, many years to become proficient, often excel ONLY if they are strong critical thinkers, and need little more than a computer and an Internet connection to be productive. Further, software development is simultaneously and continuously INCREASING in both demand and complexity. It seems as if there will never be a point at which developer wages will be going down relative to the World economy as a whole.
If I live in Mumbai and I'm an awesome developer, I'm going to bill a high rate. People will pay it because the alternative is to hire a fleet of $10/hr developers that will create a cluster fuck. Anyone who's better than them can command multiples of that.
