Because TCS, HCL, Wipro, Infosys, and some western companies also keeping outsourcing teams there (i.e. Atos) provide consistently below-absolute-zero quality that pushes and enforces bad stereotypes.
Because the real issue is not Indian people or their skills, but corporations that established a pattern of supplying people whose only skill is alleged knowledge of english language. The best thing I can say about those companies is that their IT sweatshops are better than starving, and those who learn anything seem to escape to better workplaces.
I have yet to meet as consistent (negative) quality signal as finding out the job has been outsourced to consulting company in India. I have worked with, well, low-quality coworkers (and betcha been one myself more than once) from many countries - but nowhere else there is such negative selection.
For comparison, there's no such correlation if the coworker is indian but working elsewhere.
The amount of unbridled racism on HN is getting annoying.
We outsource to Israel, Poland, Romania, etc as well, yet no one is acting racist about them.