I think you don't see the price decrease because of the increased cost to make Pro. The jackets that stayed in Canada (Alpha LT and SV come to mind) also saw price increases. Seeing as the Theta AR has been their best selling most popular jacket, I think they wanted to avoid raising the price.
I think they'd have problems advertising that no international environmental/child labor laws are broken in the production of their products simply because China's (and others) laws are so weak, if existent at all. The lack of laws is exactly what has helped China become a powerhouse of production (along with a lack of tariffs etc.) Imagine if there was an import tax on sportswear that made it cost effective to produce the goods here, you'd see a bunch of companies pop up. Arc'teryx was also bought out not too long ago (and has changed hands at least once since), and have been slowing shifting production from Canada ever since. The new management seems to value profit more than the values it was founded on. It happens all the time, and it's a result of capitalism, but that doesn't mean that the company doesn't have a choice. There are plenty of companies that stay true to their values while producing quality merch. they just might not be able to produce enough product to fill every REI. Then there's additional environmental impact of shipping from over there.
As Hugh pointed out there are people that are willing to sew in the US/Canada/where ever, but when you don't treat your employees correctly, or expect them to work 10+ hours a day (to keep up w/production schedules or whatever) they'll find another job that treats them better. You can make cost competitive, quality, local products, you just don't have as high of profit margins. You just have to pick what's more important.