In the immortal words of Rodney King, "people, can't we all just get along?". I just want to say that outsourcing includes off-shoring. You are staffing personnel from an outside source - "out sourcing". You are correct in pointing this out.
My apology to Bill for reading too much into his posts (and I did put quotes around the "joyful" word). I think that the distinction between outsourcing and off-shoring was blurred from the original article. I understand that distinction as do you. The key issue to this discussion (IMNHO) is does the outsource add value or save money? Either way enhances the bottom line. As this article suggests, it does save money (in a static analysis) but nowhere near what the hucksters that market IT services (read Infoworld lately? Notice that SOA is just shy of SOAPBOX). As you have pointed out, many other variables are not included in these types of analysis, including morale and motivation.
The idea that IT is a cost center (to me) is completely irrelevent and dangerous given what resides in the datacenter. Everyone in an organization is a "cost center". The idea that a department is a revenue generator is arbitrary and merely an accounting convenience. At least this is how it is supposed to work. The idea of soft dollars versus hard, recurring costs, etc. They are all accounting conveniences.
So where does that leave us? You and Bill are debating an issue that I've already come down hard on your side with. I've labled most of corporate America MFAC anyway. They are starting to reap the rewards of a system that forces 3 month thinking. I also suspect that we (IT guys) are catching the backlash from all the mid-level managers we "downsized" when we flattened organizational structures with email, ERPs and scheduling software (Skip, it,s real).
What's even more ironic and sad though is that jobs like accountant are already being off-shored as they are perfectly suited to being outsourced. When I finish my CEO-algorithm, I'm going to right-size those bastards too.
;-)