I worked for a company who outsourced a few times and found that the cost was actually higher in some cases and as you describe there would often be immediate turnover to folks who were far worse, and at worst a liability.... and even those guys would turn over all the time. They'd try another company, same result.

Most confusing was when things were straight horrible ... there was nothing anyone can do. I don't know if the contracts say "you give us your money and just deal with whatever we give you" but that's how people would act. The outsourced company could do all sorts of absurd things that would have serious consequences had it occurred with domestic support / new procedures and etc. But when the outsource company did it and it was as plain as day "nothing we can do about it".