Completely agree. I've been forced to rescue a number of projects that have gone completely off the rails. Nearly invariably in my experience its because someone decided that their American workers were too expensive so they decided to either hire in foreign workers, or offshore the work to a contractor.
In every situation where I've seen that situation happen, projects go completely off the rails. I don't think its because their foreign, but, I think people expect too much of these foreign workers (because they were getting that from local workers). They require far more supervision, both on a technical level (making sure the code they commit is sane) and on a managerial level (making sure they're actually committing code), and by far the worst offender, actually making meaningful progress towards the goal.
To explain what I mean by meaningful progress, I was brought in to figure out what was going on with a telephony app project that was off shored to Indian developers (think: twilio but definitely not twilio). The team of about 20 offshore developers had been plugging away for over a year working on the code at that point. Measured by things like code commits, they were amazingly productive. Thing was, there was no actual usable code. Firstly, the technology the team had been working with on both the frontend and the backend had changed multiple times, converting frameworks and methodologies repeatedly. Think: completely dumping a prototype-d Python framework application (with 100000s lines of template-generated MVC code) of and deciding to reimplement in Ruby-on-Rails, then after converting all their MVC concepts to 100000s of lines of MVC in RoR, they then converted to a symphony PHP framework (I wish I was kidding). When I arrived, the team was mulling switching to yet another framework (I want to say converting to nodejs on the backend?). The frontend had gone through many similar revisions as well.
The thing is, by many metrics, the team was actually amazingly productive. They had lots of meetings, had tons of commits, had massive numbers of bugs found/reported/fixed.
But, they had no idea about how to make the core of their product. They had no ability to answer basic questions, like, "how are you going to interface with the PSTN?" or even, like, "what database server are you planning on running in production?" Everything up to that point was based around running SQLite on their local dev machines. They didn't understand why they couldn't just continue to do so in production and moreover had no idea why (ORMs aside) their choice of database server might be important.
Now, don't get me wrong. I'm sure there are good and great Indian (and other foreign) developers. I just don't think that they are more common than great local developers and moreover I don't think they are ever cheaper than great local developers.