The only success I've had on any of these freelance sites was by treating them as a marketing sales channel. Didn't lower my prices at all and landed a small project at my normal rate. This served as the start of a more permanent relationship. After the small-time project we got into contact outside the freelancer site and collaborated on larger projects.

The main problem with these sites is not that there's developers bidding at the lowest dollar; those devs are always around, and you're competing against them even when not using the freelance sites. The problem is letting these sites own and monetize your business relationships.