Your question actually implied that the out-sourced support are OK. Actually, it is not.
The real reason is that the IT solutions are over sold by IT professionals to unsuspecting customers. Let's consider an automobile, the number of parameters a driver has to know how to control, and their consequences of each input, e.g. pressind down on the brake paddle, are very obvious, understandable, immediately observable, and controllable. The execution of that action is simple and understandable, and consistent (same action everytime, on any car, truck, van.), and there is only one way to do it. That's a bit different from dealing with computers, e.g. changing the resolution of the monitor - it's a multi-step process, different on different os, and there may be multiple ways to do the same thing on the same machine. The results are not always observable, and certainly not immediate. The rationel behind such an action is not intuitive. The actions may not produce the result you expected. etc. etc. If the automobile takes a century for the general public to use well 50% of the time by 50% of the people, what chance we have to make the general public to use computers well in a few decades.
Therefore, we have the situation of a basic problem of a complicated piece of equipment which is not understood by its intended target audience, who is poorly equip to operate the equipment, you have a pending disaster.
A good driver with a nice car is still useless if the driver don't know where he/she is going, and what for, by what time, and which route to take. But thst's exactly what many computer users are. I have seen people using a spreadsheet software to prepare a balance sheet who has not idea what a balance sheet is for, the rules governing the operation, what care he/she should take to ensure the correctness of the information on the sheet, and why is he/she doing it. I have review a program written by an engineer to try to predict, using linear regression, with three data points - an obvious waste of time. Knowing how to make a software work does not make you an expert in the job you are doing - you need the subject matter expertise. But the IT profession, probably assume every user has the proper expertise, e.g. linear regression, and therefore did not warn the management of their customers or clients about the knowledge gap.
Let's face it, the computer and software is still too complicated for the general public. Computers and software are improving. The general public are getting more sophisticated. But the gap is still great. It will take a few more decades to bridge that gap. May be an automatic transmission will appear some day, so that we don't have to clutch and shift. Right now we still have to double clutch to shift gear. But we still don't know why we need to shift gear. We were just told that's what we need to do if we don't want to loose our last 10 hours of work.
On top of the basic problem of mismatched knowledge and skill requirements, there is that quality problem, and lack of standardization. When most program uses the same user interface to accomplish similar things, and all actions act as advertized everytime, and gives immediate feed back to the users about what's being done, what's not accomplished, and what are the results, in a consistent and standard manner, just like location of the brake paddle is at the same place on all cars, and do the same thing all the time, and you can see when it's working and when it's not, we will have some hope of solving this problem.
In addition to these problems, the internal service organization have another structural problem - mismatch responsibility with resources. Most of the internal servicing organization gets their resource (e.g. budget) from the corporation, and other branches of the corporation uses the resrouce. In most cases, the service costs are not charged back. Even when the service is charge, most organization would only charge the variable cost, not the startup and sunk costs. When an organization can use resources from elsewhere and not having to pay for the total cost, or not paying at all, it will use the free or cut-rate resources to the max. It may not be done concienciously, but the cost factor certainly do not weigh too much at decision time. In such a situation, the value generated from utilization of the resources will be suboptimal, may even be non-existent. Therefore, investing in these internal serviceing organization will not bring about high rate of return. Budget increment to enhance these internal services are therefore hard to justified. When you have a run away demand drain on a resouce with limited budget, you are asking for trouble. Therefore, there is no way an internal service center, without charging the total cost of the service, can provide service level demanded by it's customers.
The trouble with the situation is that the management of the internal service organization are really impotent in solving this problem. They don't have the clout. Giving them the budget to do so will not help either - it just make the situation worse.
Total cost recovery is not the solution either. It create a monopoly, who will charge whatever they want, and become inefficient. Making them compete with external service providers will kill the internal service organization, unless they have the power, like the external service organization, to refuse doing business with an internal organization, which gets too ugly.
These problems are not unique to the internal IT shops. But the IT shop face additional problem. Organization can use only so much paper. If you provide paper to them free, they will misuse them, but will reach a point when using paper up cost them too much. There doesn't seems to be a limit in use of IT resouces. I haven't seen a case of that yet. Moreover, IT is still too complicated for the general management, and therefore the excuse: "IT made me do it" is easily accepted by higher management. Managers will not try to better utilize IT unless their job depends on it.
So, the trouble of internal IT service organization, hence the trouble with services they provide, is structural. Good IT management can help, but only to a point. IT professionals need better technology to make IT simple. General management has to understand computers and software better to know what they can do. Users need more subject matter expertise to know how to do the sophisticated stuff in their field. Organizations has to change the way they look at internal services, and organize their organizational structure, as well as their costing and budgeting practices, to reduce the problem they have.