Latency has remained mostly unchanged because there hasn't been a 16x increase in the speed of light, though, and that's the bit where moving too fast per update starts to break things.
The primary cause of latency (and jitter) on consumer-grade equipment in a domestic setting has not been speed of light considerations since before ADSL. The quality of on-premise
equipment has exponentially increased and that has brought the commodity ping time down to under 20ms. You are right that nobody pushed Cambridge closer to London, but even if they had it would make no practical difference; that is less than one millisecond of the end-to-end time.
Of course the top 1% of all gamers out there had 20ms times ten years ago anyway because they were already on (expensive) fibre and often using alternatives to the ISP-provided Ethernet gear. But NOW you can buy broadband for £20/month and get 20ms out of the box, wireless an' all.
And in fact one could argue that is partially due to an increase in the speed of light, because the speed of light in fibre
is higher than the speed of light in copper. ;-)
Anyway, in thinking about your challenge to my original point, I'm now thinking jitter is more the problem anyway, because we already know some physics in this game engine is tied to frames instead of a wall-clock tick ...