Ya I don't get that either. It's a race to the bottom. I mean I love finding diamonds in the rough that don't know what they're worth. I have a guy who does Rails jobs for me, used to work for Microsoft, went to a top Indian technical college, speaks perfect english and is really, really good - and he charges me $25 an hour. He could easily be charging $100+/hr if he just marketed himself to different clients (i.e. not on elance).
I guess it's the opposite of what's going on in San Francisco where anybody with a CS degree or equivalent experience expects six figures. There they all expect very little and are happy to get a bit more than the guys hustling hard for $10/hour.