Crowdsourcing is this new way to get really cheap design work done. By using the internet to 'source' a large group of people to check out your project, you can get designers to propose ideas to you in a 'contest' like system. Effectively, crowdsourcing creates a 'marketplace' for design work, but since one designer 'wins' a job, many more designers loose...
Here's a Wired magazine post explaining crowdsourcing and some issue facing designers (note, the comments are great):
Is Crowdsourcing Evil? The Design Community Weighs In
I DO think these sites are disruptively evil, and it's not because I don't think other organizations deserve affordable design. Crowdsourcing encourages cheapness and impatience from potential clients. These websites imply to clients that they'll get Saks like quality design work at Walmart prices, all at internet speed... but the design process doesn't actually work that way. Worse than marginalizing the design process, there are some huge intellectual property issues with these sites. If somebody were to create some artwork, and this artwork ended up being extremely profitable a few years later, what's to stop that artist from suiing that client to recoup the IP gains from his work? I can see intellectual property lawyers just waiting, like vultures, to dive into this in the near future.
The main reason that crowdsourcing is evil is the same reason that it's successful, Ideas. As all these ideas are propagated around these sites, it's just a matter of time before the designers (who aren't making enough $) get their own entrepreneurial ideas ... It's not difficult to launch your own online store (especially if you already have the software). It's not hard to set up your own blog (especially if you're creative). It certainly is not hard to set up any web business of your own, especially if you're half way there already, and all you need is an idea to base it on.
Crowdsourcing is bad for me because it undermines my investments in my own career, investments of time, money, and relationships. It's harder to promote my unique style & process when people's expectations have been set by a crowdsourcing websites. I've seen rates for design work drop, while at the same time the costs of maintaining a professional practice (expenses like education, rent, software, hardware, hosting, and broadband) don't go down at all. Why bother working with clients who assume your business is less valuable than their business?
I personally think anybody using a crowd sourcing site is going to get poor results, and no good designer participates on these sites anyway. The work we do at Studioroom includes planning, project management, writing, and development - ALL of our work is design-to-build, with SEO and usability baked right in. We want relationships with people, not popularity contests.