Cheap labor is the go to excuse, but what Steve Jobs reveals is that its not the only problem. Here's a quote from the biography:
"Jobs went on to urge that a way be found to train more American engineers. Apple had 700,000 factory workers employed in China, he said, and that was because it needed 30,0000 engineers on-site to support those workers. "you can't find that many in America to hire," he said... If you could educate these engineers, we could move more manufacturing plants here."
Its easy to say that Apple is manufacturing in China because of cheap labor, but from the "horses mouth" you see that there are real practical reasons as well.
Steve Jobs loved control, and I think he would have loved having factories where he could easily visit and influence the colors of the machinery (like he did in the early days of Apple).