To send/receive a multi-channel audio/MIDI buffer to/from a server, you need to go through at least a dozen protocols, including waiting for the speed of light between you and your server. If you're in NY and your server is in LA for example, that's already 30ms gone just considering speed of light. Other factors multiply this latency by an order of magnitude.
Okay and you would say that if you optimised all of these factors you would end up with a latency around 300ms?
I just set my Ableton Live to 300ms and it was actually o.k. I think the reason is that a lot of people don't actually 'play' their instruments these days - at least in electronic music.
Instead, they program their drums by putting midi notes on the grid and then listening to the result. The same with synths etc. So when I work this way, the 300ms latency are actually bearable. Of course it would be different if I used drum pads to play my drums 'live'. But honestly I don't know many people who do that and when I watch tutorials on YouTube also almost no one is doing that. A lot of electronic music producers 'play' their instruments with their mouse button.
To most DAW users, 300ms is unacceptable, so any service that processes audio on a server needs to make this caveat very clear in their documentation. The problem with such a business idea is that local computers run DAWs just fine, so very few people would seek remote audio processing.