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You could but it's much easier to get servers in a near-by area with AWS and other easy virtual hosting providers.

There's no reason you couldn't, but distance is not the only source of latency, so you're unlikely to find an existing case of someone doing that intentionally.

Easy enough to whitelist geo-ip matches or large net block ranges for a similar result.

You can set a TTL limit in the kernel. Close enough to a latency limit.

TTL checks are sometimes used by mobile providers to try to prevent tethering.

that is so foul

That's actually used for neighbor discovery on IPv6 to unconditionally limit it to unrouted packets.

I think DRM would be a much better use case than security (SSH).