I think there is a huge opportunity to move more software development to developing countries. It could become the next version of sweatshops, which have done an immense amount to improve the wellbeing of people in the third world. The winners of using cheap labor from overseas are the companies that hire them and the people they hire. The losers are the workers in the first world who are outsourced. But it's crucial to understand that both nations as a whole benefit, and the first world nations are more than capable of redistributing wealth.
When you cut through all the self-interest and xenophobia surrounding outsourcing, there still remain many quality and communications issues. But I believe these will be reduced as more people learn English and recognize the value of English as a market skill.