What bothers me most is that many clients don't stop to consider **why** someone is asking such a low fee.
I recently had some work done via one of the freelance sites where the freelancer was from a western country, but asked a silly low price for the work. In a private message this person explained to me that he had been working via other channels for a long time and now wanted to get a firm foot in the on-line freelance exchange world. To buildup references and credit in his on-line profiles, he asked low amounts of money for the first assignments, just to get the ball rolling and build credibility.
I hired him and he delivered good quality work. Cheap is not always bad. Cheap has a reason and if you know the reason, it may be OK to go for the cheapest option.