I bought a 2005 Subaru Outback and the headlights in the on position are very dim.

You have a bad ground on the front lights look for broken wires on the radiator support or in that general area

We looked everything over and no bad wires. Even looked underneath. Still dim.

I don't have a wiring diagram for this car but if the brights are working normally check the underhood fuse/relay box for a low beam relay it could be bad, for somereason there are complete headlight wiring harnesses on the net for $20 I didn't see a recall but they usually don't offer those kind of parts unless there's a problem. Someone else on this site may have a diagram, so wait a bit and see if there's one available here.

Possible corrosion in the head light electrical connections.