Google proposing DNS extension for improved server locality
googlecode.blogspot.com
googlecode.blogspot.com
Thoughts: Your resolver, or the DNS server you speak to will need to be updated to add a new RR for this. The ultimate authority will need to do something sane with it. Caching will be complicated if you have clients in multiple locations.
I somehow wish IPv6 allocation is hashed, all neighboring IP are randomly unrelated.
This won't have any effect on it, actually. Servers that are targeting users by location use the IP sent with each request to do localization, rather than which server was chosen by DNS. Otherwise it would be trivial to choose a server in the appropriate country and add an entry to your hosts file, bypassing these restrictions.
You could try to argue that making it possible for global companies to make their content arrive faster is bad for net neutrality, but given that this doesn't adversely affect other servers (and possibly benefits them by reducing congestion), that would be a hard argument to swing as well.
Edit: and for your second comment, I have no idea how routing algorithms would work if that were the case.