I've used outsourced services several times successfully. I don't think using geographic location is necessary a good indicator for outsourcing value. In my experience it depends on the type of service you are seeking. For example, I've used crowdsourcing services for logo and web designs and discovered creativity has no geographic boundaries. Neither is the skill level necessarily the only indicator for the best creative. Some designs have been submissions from design student or freelancers with no formal training.
As for technical work, I seek service based on the following criteria:
- technical competency and skills
- communication skills
- Process skills (to manage overall risk of project)
- references from existing clients.
Country is secondary to the above list.