Latency exists at multiple layers. Network latency is reduced by co-location. But you could still have computational latency. And, if, for example, your application is written in a high level language, you could have latency caused by inefficiency in your compiler.
And the invention of the automobile was terrible for coach and buggy drivers... and the invention of gunpowder was terrible for knights in shining armor... and the invention of sails was bad for people who only knew how to make rowboats... and so on...