The glut of US tech workers is due to the excessive number of H1B visas being issued.

That's been part of it. But even with the H1B and the outsourcing, there's a ton of technology to be administered, maintained, and repaired. We're a technology economy. The glut of US tech workers is due to induced demand.

Why hire an expensive American new graduate when you can hire someone from India with 3-5 years of experience at 60% market rate instead?

Because you need to be able to communicate your needs fluently and India is in the wrong time zone. You can outsource some of your work some of the time, but follow this logic to its conclusion and you begin to ask why you're even in business in the states. Why not just invest money in India's private sector if you're so convinced their workers can do a better job at a lower price? Why have an American business at all?