Perhaps this lowering of expectations applies to in-house developers and not just consultants. After all what would happen if when taking on permanent staff you gave your recruiting agency a job description and then simply accepted the developers they sent you without interviewing or selecting them in any way. It would be inevitable that you'd end up with people who would never have got the job in the normal course of events, for example because of over-inflated claims of experience and technical knowledge, or just general incompetence. Then what would happen to expectations as you follow this opposite to the Lake Wobegon hiring strategy? Surely within a short period of time your development group would be working at a lower level of productivity and quality, not just because the average level of skill has dropped but because of the viscous drag of ineptitude the newcomers will exert on your more competent developers?
So why won't this happen with outsourcing? You won't have any choice over the developers working for you. You might strike it lucky, you might not. The chances are you'll end up with developers with less experience and competence than you're expecting. With time they may well come up to speed on the sort of work you do but then you find they're been transferred onto some other project the outsourcing company has signed up for and you're back to square one with a new bunch of developers. Even at a distance your own developers will be affected because they will have to spend a lot of time sorting out issues which the external developers can't handle. You may even end up with the bizarre scenario where your developers all but stop doing any new work because they spend most of their time helping out the external developers, or fixing bugs because the external developers don't know enough about the product to fix them. And so you reduce the level of expectation that your own developers can write new code. It's not difficult to imagine how demotivating this can be for those developers.
One final point: the anecdotal and personal evidence I have on this is that it is nothing to do with where in the world work is outsourced to; it is fundamentally related to the nature of outsourcing.