> decided one day that manufacturing would be cheaper to outsource and better (short term) profit was to be made by outsourcing it all to China.

To build a $100M software company, you need 6 engineers and 6 laptops.

To build a $100M hardware company, you need 60 engineers and $100M.

Everyone decided on the most logical choice. It gets even worse if you jump into profit margins, as software is the unambiguous winner there too.