I have no regrets and still employ the same people today, but it just wasn't so straightforward as you're making it out to be. I think it's actually easier for a startup to have, let's say, an entirely Indonesian team including the founders, targeting an American market, versus a startup having an American founding team then start hiring in Indonesia. (For big companies I don't know, but I'd imagine it all gets even more complicated.)
I had no luck with it at all myself. I'd get completely useless low-quality crap work out of these guys when I got anything out of them at all.
I think you'd have to hire some local managers and maybe send over some experienced devs from the USA to train up the locals, at which point it'd only be a matter of time until they realize their new worth and jump ship for FAANG or whatever.
We (Westerners in general) would indeed be screwed if you could just replace people with cheaper workers from other countries. It's not that simple, though. Language and cultural differences are a massive barrier. I say that as someone who has worked with a lot of East and Southeast Asians who are brilliant, hardworking people -- but it still takes a lot of effort to figure out how to work together, and that's at a startup scale where you can really pay attention to each person. Larger companies tend to have a lot of outsourcing horror stories.