I also don't find that new smartphones have much touch-based interface latency; but even so, that kind of latency doesn't have anything to do with the internet, nor the halcyon days of late 1998. To my recollection browsing the web in the late 90s was far more exciting but also far less useful than today.
The modern internet has a lot of inefficiency, but I don't see how you could seriously claim it's slower than what we had 20 years ago. Sometimes heavy web applications are relatively slow because they're underoptimized, but that's less of a technology failing and more of a developer failing. Most websites load spectacularly faster, and perform better, than all but completely static HTML websites from two decades ago despite having much larger byte footprints.