That's certainty true of Brazil's main airline TAM (now called LATAM). You often pay about 50% more as a foreigner. Note that Brazil speaks Portuguese, not Spanish, so your experience may have been with another South American airline doing the same thing.
Even if you use LATAM's Brazilian portal where you have to navigate in Portuguese, you won't get the cheaper Brazilian price. That's because they have this great little trick to determine if you're a foreigner. They demand that you enter your CPF number, a Brazilian national identity number, to buy the cheaper ticket from the Brazilian portal. And you can't make one up, or use the CPF number of a Brazilian friend, because they query a government database to verify that the CPF number matches the purchaser's name.
It's discussed in more detail here:
http://brazilsense.com/index.php?title=Booking_a_domestic_fl...
Collecting the CPF number is not dictated by the government. You can buy a ticket in person at a travel agency in Brazil or at the airport without a CPF number. As far as I can tell, this CPF business is LATAM's way to get a higher price out of foreign visitors for online purchases.
Anecdotally, I booked a flight a few weeks ago through expedia.hk for an itinerary that was not even available through expedia.com. I'm not sure if they geotarget, but for Expedia at least, the TLD you go through matters.
I've also found a South American carrier (I forget which) to have significantly different prices depending on whether the website is in Spanish or English (alas, they wouldn't accept my US card through the Spanish site).