If the interpretation that all software development expenses MUST be treated as R&D expenditure and claimed as a deduction is correct (which it might be, but it might not be), then it's worse for off-shoring because the amortization period is 15 years. That is, you paid off-shore contract developers $100k, you can only deduct $6667 of that in any given year, over the next 15 years.

"Just as any other expense" meaning that it's a software development expense. I don't think it matters much in US tax whether you do it in house or not.

It might matter if you buy finished software modules and integrate and resell them.