First part yes, second hell no. I haven't met testers in past 16 years with deeper dev knowledge (because they would be already doing that, usually better paid

First part yes, second hell no. I haven't met testers in past 16 years with deeper dev knowledge (because they would be already doing that, usually better paid and more creative), business knowledge alone isn't gonna cut it. Unless testers are actually coding unit & integration tests in same language and platform (again, never saw or even heard about that, normally devs did those). Another thing is that if you go external -> itnernal, you save time and money on whole hiring process. That's quite a bit of valuable time of senior people, and at least in corporate sphere easily 6 month salary of the hire that would go to agency.