I think we have played this game long time ago. If products were a question of a single request then outsourcing companies would dominate over product ones.

I think a lot of product development happens in the itearations after the intial prototype/MVP and so on. It is not only the technical aspect to it, you need to spend time on a problem deeply understand what are the root causes of pains and address them in your product, both from UX and also from technical perspective.

People were able to "prompt" a product even before to an outsourcing company, but they'd rather pay the fee to a product company because of the expertese they have gained through out the years and all the users they've spoken to.