What happened is that most IT never returned but the work that IT was doing is now done by cloud service providers. Because of immense software scaling, it made sense to pay for quality workers.

You can sell each additional software product at very high margins so it makes sense to spend a bit more on the worker for a slightly better product that will result in many more high margin sales.

Sometimes they found that it was more effective to do low cost work in cheaper US locations (American South, etc...) than India.

A large telco I worked for (owns a significant % of global cable TV assets and programming) used to outsource all hardware and software development. While I worked there as a contractor from 2013-2018 I saw them replace this with large onsite teams in their HQ in the EU and nearshore teams in Belarus and Ukraine.

I've encountered some of these nearshore companies in E. Europe multiple times over the last decade, business is booming for them.