I think that it is important to understand some of the history behind what is going on with outsourcing. If you go back a couple of hundred year ago, before the development of the modern corporation, there were small businesses and farmers who had no choice but to outsource much of their operations by contracting with others to get what they needed. Of course, since it had never been a part of their operations, it was not called outsourcing. Simply, if you were a shoemaker or a blacksmith, you would not have the time and resources necessary to also be the tanner or the iron miner.  

One of the great advantages of the corporation was the it could reduce  the transaction costs, coordination costs and risks (opportunity costs) associated with conducting all of these activities through contracts between independent parties. In other words, bringing numerous activities into one centrally controlled organization reduced the overall cost of production.  

Now, technology has reversed this process for some functions. With the dramatic drop in communication expenses and the differential between wages in different countries, the low cost method for many functions now falls outside of the corporation. In other words, technology is reversing some of the cost calculations that accompanied the development of the modern corporation.