Service centers are the tip of the iceberg. That's actually one of the simplest tasks in IT, which is why it was one of the earliest offshore candidates. Yet as you have noticed (and so has Dell, who reversed its decision to offshore support for business clients due to complaints similar to yours), the quality just isn't there.
Complex engineering is a far more difficult thing to offshore. The popular notion seems to be that it involves a highly skilled person sitting alone and doing mysterious things with a computer. In fact, it's a highly collaborative, communication intensive process. Some models of doing this lend themselves to better success offshoring, but most do not. And almost none can claim to offshore with no impact to productivity, quality, or timeline. The communication problems you notice in the call centers are amplified many times, even in well run engineering projects, by the simple volume of communication required.
Another thing being ignored is that, like most other countries in the world, the best and the brightest Indian IT workers come to the U. S. and pursue green cards. Assuming that these folks are representative of the average Indian IT worker is a fallacy.
That we have given away -- literally thrown away -- the low level stuff, the mid level stuff, and every other level WILL SOON follow -- the "high level stuff" can NOT sustain far from the lower.
See this era of "out sourcing" for what it is -- not productivity improvments, not innovations -- but rather exploitation of the poor, of cheap labor rather than technology.