I agree with you completly. Yes India does not lots of things to admire about, mainly their hospitality, culture etc. but slowly these things are also changing. we have started aping the west for things like smoking, drinking live-in relationships less regard to elders etc.
Also the point about charging higher amount to foreigners is really a shame to our government. I don't think any other country has such a differentiation. recently when i had recommended my expatriate collegue who also pays taxes in India to a Naturopathy clinic, we were shocked to know that inspite of his having lived in India for last 10 years and paying taxes in India, because he had a foriegn passport, he had to pay 4 times of what a India had to pay. Shame on us. I sincerely hope the government will change these rules and attract more foreigners to see the Marvels of India...