This is precisely what I've done with my life for the last five years. It works, on one condition: you must find, connect with, and sell the Right Kind Of Customers for it to work.
If you're just a programmer (which, of course, Patrick famously recommends against identifying as), you are competing against every other "programmer" with your list of bullet-point skills, many in places a lot cheaper than even your "cheap area in which one lives"— e.g. eastern Europe, former Soviet states, etc.
http://en.wikipedia.org/wiki/Iron_law_of_wages
The trick is to position, market, and brand yourself as a specialized, boutique consultancy that incorporates various highly-sought-after technical skills in a complete "special sauce" package for businesses to achieve business-ey goals. People LOVE good abstractions, and are willing to pay for them. Be a problem solver/revenue increaser, not a "programmer". If you try to compete on a specific, easily-defined technical skillset, you'll lose to vast hordes of internet-connected Romanians, Latvians, and Ukranians every time - they can maintain a very comfortable standard of living at prices way below what you could offer your services for.
At the same time, I really don't want to commute and don't feel comfortable spending more than double my salary on a house (I don't want to be "house poor").
In striving to satisfy all these desires simultaneously, I'm led to the consideration of consulting in the next few years. A few posters (patio11 and a few others I don't remember) here on HN have convinced me that, if done right, consulting can be a path to financial independence without the unpredictability of the startup "lottery". The idea, I hope, is that through partially remote consulting work one can make a wage which is disproportionately high compared to the cheap area in which one lives. It remains to be seen if any of this speculation is actually true.