My company hires local Maryland software developers, who already come at a premium due to the proximity of the Federal Government and (by extension) large defense contractors. We compete against firms in places like Vermont and South Dakota, who already have a much lower cost of doing business even without additional taxes such as this. What Maryland lawmakers either don't understand or perhaps don't care is that the Internet is a great equalizer, not just nationally but internationally. As you've stated, consumers don't care where a business is located, they simply want what they want at the lowest price they can get.
Regarding outsourcing, understand that this law forces companies such as mine to look offshore for programming help in order to remain competitive. Thus, at least some of the revenue gains Maryland hopes to realize will be offset by losses in income taxes, as these dollars I would otherwise spend locally will now be spent overseas.