I'm not sure if it actually is working out, or if the companies outsourcing are just absorbing the inefficiency.

Every outsourcing effort I have seen at some of these massive companies has been pretty tragic, where the best that can be said is now there is a shit but cheap option to be used where the quality doesn't matter.

This gets repeated across all the entrenched players simultaneously, while the product quality stagnates or declines (but the stock goes up).