I think what is important is that you understand who you think you are hiring, and can set expectations of behavior for both the contractor and the customers. The little chart, hopefully, precipitates that decision, or at least brings forth the idea that there are tradeoffs.
Deliberately hiring cheap workers. If the idea is to keep costs as low as possible and still turn out a functioning product it makes complete sense. If the idea is to turn out the best product possible, you obviously wouldn't want to do that.
The idea is to find developers on the "left" - low quality, hand holding and get them to churn out a market testin app for a small amount of money.
That seems crazy. Deliberately hiring low quality workers?
If the app is so trivial that low quality cannot break it then I guess it works. Does not sound like a sustainable solution though.