1) Databases - if your app servers at the edge need to talk to your database back at your main datacenter, you've just made performance worse. Replicate the data to the edge? Now it's harder to keep consistent.

2) Too many edges - if you regionalize too heavily, you end up restricting your matchmaking pools to smaller groups. Matchmaking theory says that either (a) quality of matches decreases or (b) time to matchmake increases as your pool shrinks. At some point, to have a healthy matchmaking pool in a game with a wide variety of skill levels, you have to consolidate. Riot already had Euro datacenters (with separate accounts, which solves #1).

3) Performance - cloud low-latency UDP performance isn't nearly as good as you can get yourself. Plus, you have more control (and leverage) doing it in-house.

4) Perception - some level of latency becomes imperceptible, 50ms is getting pretty close to that number.