OP is right. I am worked at yahoo till recently and I am an Indian and I don't think people in Bangalore or Beijing are bad. During my career in India and in US I met quite a few good engineers . In early days of Yahoo! India the quality of Indian engineers are pretty good. Off late they are just hiring whoever send in a resume. I know people who are interviewing these candidates even when they say no the manager is hiring because they have fill up the req. Its really sad state you hire these so called "programmers" who can't understand basic things and its frustrating deal with and explain every small details and the work that comes out is completely different from what you wanted and than some more delay.
No one complaining about American or Indian engineering quality I seen bad engineers on both sides. Its about getting quality engineer. If you remove pretty good engineers or team here and try to hire below average engineers from India only because they cost less than its really fucked up you are not really saving up anything in this only to realize your product is delayed for an year and it turned to piece of crap.
Don't be so defensive about these comparisons not everybody in India are great programmers nor they are fools