I am a Software Engineer residing in India. I have never worked for Outsourcing shops, however most of my friends work there. I have worked for Product based companies, and I can contrast the two. Comment on Point 1: Quality: Software applications created by CS students generally are never meant to run for years and have new features added to them. So CS students never focus much on Scalable design, modularity and engineering discipline in general. The discipline in Design, Implementation, Source control and execution was taught to me when I was an intern. Every aspect was reviewed by peers until it met the standards. However, I observed that outsourced project based companies are more focused on delivery/schedule than on quality. I feel that the quality control must be done from outsourcer's end and that too when the code is being developed. This might help them avoid unpleasant surprises.

Point 2: Passion: There is a huge imbalance between number of graduates we produce and number of jobs available in India. This works in favor of students who take up CS studies not because they like it but because they thing they will be employable.

Point 3: People look down at design?? They equally consider System Administration, Document Writing, Escalation handling as inferior.