Outsourcing isn't a bad word. What specialization is to labor (plumber, electrician, mason), so is outsourcing to business. Even Perot Systems/EDS outsources services even though they are a recipient of IT outsourced services by others i.e. Iron Mountain, drug testing lab, Sodexo food services...
Outsourcing allows a business to manage risk better, it takes advantage of economy of scale (doing things in large volume) and increases efficiency, allows for a more constant flow of work vs on and off surges, it allows for a greater degree of specialization within an area and also for greater institutional knowledge to develop. A firm that does nothing but IT and has a dozen+ customers and 24,000 employees has the size to build a data-center, to buy equipment that if you do things in smaller scale would never be economically viable. Let car companies build cars, let a lawyer firms do what they do, but when car companies try to run an IT firm, you get what happened to Perot's old firm EDS after GM bought and ran them into the ground years past. Even the corporate cultures, the regulatory frame work etc. varies from one firm and industry to another.
Example: When National Alamo car rental outsourced their IT to Perot Systems years past, they gave that job to a large company that is specialized in that field. Truth is, experts even from other accounts can be called in for projects or emergencies and you have a IT firm with 24,000 employees that has experts ranging from programming to databases, networks, security, providing support and project management etc all at a fingertip vs a firm trying to do it in house and reinventing the wheel. A firm like Perot Systems has done hundreds of projects and when they take on a new task they have data to fall back on, pre existing channels with vendors, logistics, experts that have done dozens of projects and are PMP certified etc. They have an existing data center and in fact have several... At the end of the day, you get consistent high quality service, the risk goes down on big projects, if there are issues they can often isolate and fix it quickly and they usually can do this at a cost you can't match in house.
There is a difference between Outsourcing and Off-shoring.
But even off-shoring was inevitable after NAFTA, China joined the WTO etc.