Once you get a client for repeat work they are usually happy to pay a higher rate because they know from working with you once they are pretty much guaranteed good work.

I've had several clients who had bad experiences on elance and other sites (undelivered work, bad developers etc). They decided to give it one more try and hired me. They don't want to risk the bad experience again and are willing to pay more to continue working with me (and we work outside the freelance sites from that stage on). It's an expensive and timely process to find a good developer so once clients find one they like to stick with them.

If I never used these sites I think it would be pretty difficult to ever find clients. Most of my other clients come through recommendations by clients I originally found on elance etc.