I agree Bizguy & Jessica.
Outsourcing is something that needs to be managed well..it's not a magical solution you just throw your troubles at and they are solved.
The best cases are when the outsourcing is invisible to the customer, because then you can really keep your brand image and reputation. For instance, whenever I call a company and get forwarded to an off-shore call center I know that poor customer service is going to come and usually don't come back to them. But if I order someone online, and they have outsourced the order fullfillment to someone offshore I am unlikely to know that even happend, and there is less room for error there.
That being said, sometimes it makes sense for the company to go for a slightly lower quality but much higher cost effectiveness.