Yes, k-nn is theoretically the one of the best ML algorithms in the sense that it will find the closest items in the training set. For classification or finding similar looking items it is great. However, it has pretty poor running times for evaluation of unseen data (http://nlp.stanford.edu/IR-book/html/htmledition/time-comple...). This is contrary to something like neural networks, which take a while to train, but then evaluate very quickly. For real world use the training times matter to an extent, but in a web app or real time application the latency from knn is just impractical.