Essentially the thinking went. If everyone is remote, why not hire remote workers from countries that are a lot cheaper. Suddenly you had a hard time finding contractors and FTEs from those countries because everyone was hiring them. At the same time it got really hard for entry level developers in the USA to find work.

The supply/demand curve shifted and now those workers are becoming more expensive while domestic workers are becoming cheaper.

Great question. I'm not an economist so I have no idea why. The outsourcing rates I've all seen have gotten way higher in the past ~10 years though.

India specifically is in the middle of a massive years-long labor movement that is changing the terms of work there and I believe shifting the degree of alignment with western corporate outsourcing though I'm not very informed about the details.

Scale is beyond comprehension though, there were 250 million people on strike one day last summer. This is not ever really covered in western media or mentioned on HN for reasons that are surely not interesting or worth pondering at all.