In each case, if there are people who need these jobs in other countries and who can cope with the prices, it's fine then. But they should keep in mind that normally the buyer does not fix the prices, but the seller, and that undercutting and competition are no good companions of teamwork and communities.
Well then I suppose all production outsourced to China and Taiwan and other low(er)-cost countries should be stopped in the name of teamwork and fellow-feeling. I think that's called socialism.
I am not militating against high prices at all, but you can't ignore the different economic settings the translators live in. We can't force someone to have regard for our own more expensive economic conditions.
I don't believe the only difference between these two types of translators is price. I am sure the lower-priced ones are also more lenient towards missing deadlines, leaving a few spelling mistakes in their texts etc. That's where one should compete - boasting in never missing a deadline or leaving obvious mistakes in the translation. Clients do feel this difference even in "cheaper" countries.
[Edited at 2012-02-06 12:52 GMT]