I agree with what you say that it is people's lag sometimes but what I meant by cheap servers is that some people's internet might be good but it's not strong enough to connect across the world. They might have internet that is only good enough to connect smoothly with their own country. I blame the lack of region options in the game.
Definitely. The combination of "acceptable latency" plus the inherent latency of international connections can make for total latency that's unacceptable. It's also geographic - US-East has a FAR, FAR shoddier connection to Japan than US-West. US-East has to first go through, almost exclusively, the NYC interchange, then route through the (pretty shoddy) grid in the midwest to US-West. From there it goes out to the Trans-Pacific Express to Japan. If the TPE is bottlenecked it will be slowed further. If it's "at capacity" the transmission will be bounced, at which time it's routed all the way back through the midwest, through the NYC interchange then across the Atlantic Express to Europe, and then to Japan from there. Even on a good day, US East will have one of the worst connections to Japan in the world in terms of latency, based on the sheer distance and number of (clogged) interchanges it's going through.
On the other hand the lag during splatfests shows us that a lot of US internet is so bad that even with all that geographic latency to Japan, our connections to Japan are often better than to other US players.
Still, when I play, I'm mostly playing Japan, which means even under the best of conditions, I'm a tenth to a quarter second behind the action, assuming everything is ideal.
Sadly regional servers just won't work for the number of Splatoon players out there. I read somewhere that 80% of the active player base is in Japan. Given 1M copies in Japan, 4M total, that doesn't seem quite accurate, but it's certainly a large part of the player pool. They barely have enough players for matchmaking as it is. Splatfest works because it's a special day that even inactive players join in to get their snails. But daily? We'd have bad wait times without Japan. Compared to COD's...what...20M player base I think, their options are pretty limited. I also imagine that if Nintendo WERE to run central servers they'd all be in Japan anyway. Currently the matchmaking servers are in Japan, the eshop, the website, even the search page in the web browser all goes back to the Japan hosting. I don't believe they host servers of any kind in the US or Europe. Even the webserver is the Japanese one.