Good question.
As far as outsourcing, there has already been the suggestion, to sell Iraq on Ebay: "sold as is, warranty not transferable, a real fixer-upper, for immediate occupancy."
Seriously, though, you are right. There is a vast gulf, between "third world" nations such as Mexico and Rwanda. Iraq is more like Mexico; they have the capability to run and repair all the infrastructure in the country. They did it after 1991, they could do it today. They choose not to, today, because the Iraqi people are collectively making the decision not to collaborate with the occupation. Inaction is action.
So Americans are left to do everything. And we must do it in a war zone, with soldiers who often weren't trained to do what we're asking them to do. When we hire civilians (and it wouldn't matter if they were Chinese or Indian instead of Americans) to do jobs, they won't do it where bullets and RPGs are part of the work environment. This tremendously increases our costs. Anything that increases our costs, helps the guerrillas. Our army was trained to re-fight WW2: smash our tanks to the enemy capital. We do this very very well. We don't do Nation Building well, or garrisoning a hostile and profoundly alien population. It costs us $100 to do a job that could be done for $1 in New Jersey.
"If you only have a hammer, you tend to see every problem as a nail." - Abraham Maslow (1908 - 1970)
America has a big hammer, and we're roaming the world, hammering down screws. When they don't go down well, we just hammer harder. We're an optimistic people.
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