I am an economist by training, and also an investor in cross-border startup teams. On both fronts, the original article strikes me as unfair and inaccurate.
The fact is that there are scores of successful valley start-ups and product tech companies, with successful teams of product engineers in good ol' India writing their core production ready code - (not low cost "back-end", whatever that means) - I could name dozens of such companies.
Equally, there are new several start-ups founded in India going after global internet product markets (see freshdesk.com, recently funded by Accel Partners).
Like in the Valley, some of them hire great programmers, some average, and some awful. This reflects the labor pool of a deep market of available talent.
The "original" OP is clearly being unfair to hard working entrepreneurs and hackers in low-cost economies. As well as disregarding, basic economic theory of a connected global labor market. (Sorry Paul Krugman!).
Disclosure: I am investor in the OP who wrote the response.
p.s: Replace "India" with low cost country of choice.