It's all about market positioning.
As a marketer my field is different to a degree but still there's consultants who charge $300 an hour and those who charge $5 just as there is full time employees making 250k vs 25k. Simply put the two sides do not compete.... That is to say someone looking for a $20 an hour hire is not my client and I'd never try to upsell them to be while someone looking to hire me isn't going to consider that low end bid either.
Companies approach services for more than just their rates so while the list of benefits may seem like "blah, blah, blah", it's those differences that many people look for. If you want to play in a higher level market you need to offer the right benefits [it's not just development, it's quality, accuracy, and management of it all] and find clients looking for them.
Even overseas providers face this issue as there are some great shops that are remote and thus not $10 or $20 an hour. If you think it's tough in the western markets imagine trying to convenience someone that you're remote work is different than someone else. There's a reason why oDesk type sites are not a strategy when you pass a certain pricepoint.
Of course starting with a program known as free [not just open source] is going to lower the bar, muddy the water, and make it harder to find clients who stand out. But that's the game.
And real estate isn't doing so well these days...