I've known more than a few 20-somethings who charge over $100/hour and a couple that are around the $200/hr mark. There's no correlation between expertise and hourly rate in my experience. Some of them are ripping people off and some are undercharging.

The reason this works is that person writing the check is usually not spending their own money, or if they are it's a drop in the bucket for them and $5k or $15k isn't much of a difference. They've probably already wasted $100k+ in salary over time having their employees try to handle the same task before deciding to bring in someone new. The other factor is the (mistaken) thinking that if you charge a lot you must be worth a lot.

At most companies the idea of giving one of their own programmers a $20k cash bonus to do a 10 week project in 1 week is out of the question, but paying a consultant to do the same thing is no big deal.

The Expensive Consultant idea is what IBM basically lives off of these days. In their case I think it's pretty unethical, but for individuals who are truly qualified it's a win-win situation and I highly recommend it as well.