At the end of the day, you get what you pay for. And some companies are clearly okay with said cheap work. There's a reason the IT industry in Hyderabad/B'lore is booming. Want solid contracting work without slackers? Sure, you can still find plenty of those too in India (thoughtworks?) but pay up (albeit less than what you may have to in the valley). The reason you're outsourcing core-work/parts of it to India should be that you can't find enough talent locally; not for getting it done cheaply or because your in-house developers think the work is 'beneath' them (I've seen this happen way often, dev with inflated ego doesn't want to test. Wants to do a cold hand-off and expects the cheap developers to be on his level and take dirty work off his hands. Starts cursing). So, there's probably room for both (cheap and expensive) industries in India. Unfortunately, you might have to expend more effort before you find the company that fits your needs.
Articles like these insinuate nothing but Xenophobia and racism. More often than not, Indians are always on the receiving end of it despite contributing so much to the software industry in general. The author from Ukraine of all places probably wants soviet like discipline and work-ethic for USSR salaries? Yeah, ain't gonna happen comrade. The employees on the other-end aren't stupid either. They have many friends in the US making bank working at Google/FB. Why would they work their balls off for peanuts?