if you technically pull people out of poverty by outsourcing to the lowest paying, least labor regulated parts of the world, is the fact that extreme poverty went away in those areas even a good thing?

Yes. Your prospects of a healthy life increase when going from not being able to provide for yourself to being barely able to provide for yourself by working in fantastically poor conditions.

If a sweatshop didn’t provide more worker value than extreme poverty, people just wouldn’t work there.

The bare minimum of improvements is still an improvement, and that we should strive for better than the bare minimum doesn’t make the bare minimum worthless to the people who got it.