Of course for some games it is a problem, but not for every game. Also I hope in the future latency problem will be solved e.g. but placing more DC around the world.
I'm not sure it's entirely solvable for some games, given the extra constraints imposed by remote processing. Gamasutra had a nice article[1] about responsiveness a and lag few years backthat wasn't addressing this problem specifically, but does put it in perspective a bit.
1: http://www.gamasutra.com/view/feature/3725/measuring_respons...