For example, from my work on a fibre connection, pinging a local website takes about 2ms, and a US website about 160ms. Double that for residential DSL.
Also, national bandwidth is essentially free, and bandwidth to the USA is $$$.
It's generally billed at the same rate for all traffic without distinction. By hosting in the USA you assign the cost for bandwidth to users.
The economics of our ISPs and hosts are driven entirely by the price of about 3 major pipes out of the country.
My reply was in line with the parent post that the (implied) reason that Aussie business are reluctant to host overseas due to ignorance of options, perceived issues around support etc. From my dealings with Aussie business (of the sort that would host at lower tier hosting firms like the one in the article), they are ecstatic just to have a website. Issues such as latency don't even come into consideration.
http://radar.oreilly.com/2009/07/velocity-making-your-site-f...
So potentially, the money you save by hosting overseas is lost in lower conversion.