I think of it like a casino. It's offers a service, sure, but financially operates like a black hole by in all likelyhood removing more value from the economy than it creates.
But it's not a black hole. It's profitable company that gathers money from global market (facebook) and sends it partly to Argentina and partly to Canada. Canada still gets positive money flow. Yes, OP didn't create developer jobs(some other jobs he did create) in Canada, but he most probably couldn't start the company if he didn't outsourced, so jobs wouldn't be created any way. And it's hard to judge what has more value, positive real money flow to the economy or several absent vacancies.
I think a lot of the negative reaction has to do with the sense that the employer did it for the wrong reasons and was excusing himself and the insult to his own business community and developer community. Specifically, he says he couldn't justify paying more than his own wage to his employees. Bulls-t. He brags that there was no shortage of talent. Bullsh-t. He could have changed the game, by offering more than a wage, to give just one example, but he chose simply to pay as little as possible and to strictly minimize his short-term expenses and income at the expense of a robust economy. Many business owners happily draw a minimal wage as their business grows, knowing they want long term value in ownership. He is operating his business like a casino.
I would actually place the local staffing at an order of magnitude more valuable to the local economy than the direct positive cash flow into the business coffers, but I'll admit it's subjective. To me, it's the difference between a ghost-town and a self-supporting economy that can thrive because it can stand short-term unemployment.
Sometimes that's the only choice (steal the loaf of bread or starve), but when everyone does it, the effect is not sustainable and he attempts to justify it for hollow reasons.
Furthermore, developers in Argentina are worth as much as their Canadian counterparts, but for whatever reason, they undervalue themselves to the tune of 1/5 and the employer's eagerness to jump on that reeks of exploitation as much as stinginess, adding insult to injury.
I don't know enough to claim he's breaking the law, but (spoken in reference to the recent RBC stuff): "'The rules are very clear. You cannot displace Canadians to hire people from abroad,' said Immigration Minister Jason Kenney." ( http://www.cbc.ca/hamilton/news/story/2013/04/05/bc-rbc-fore... )
