Funny. In my experience telling something as it is is a very easy way to piss of the client, who in general have huge ego that they are from a superior culture.
There are unreasonable people everywhere, of course, so it's not that weird to find a client who doesn't understand the value of this service.
I'd agree with OP on this. I've never seen a distributed, outsourced approach work. The product has always been poor or even worthless.
Having said that, I have seen distributed, in-house projects work, sometimes very well, even when the teams were internationally distributed, and even with moderate language barriers.