On Sonic fiber internet in San Francisco, I get 1.5ms to the POP. It is only 4.5ms to my VM in Hurricane Electrics Fremont DC.
~20ms is that threshold, but even 40ms latency is barely noticeable for single player games.
For casual gamers and turn based games maybe it could work, as a niche. For FPS, multiplayer, ARPG, and so on, it's a dealbreaker, anything over 100ms feels too sluggish.
We should be happy we have so much autonomy with our own hardware, I don't want some big cloud company to be able to tell me what I can play and render, unless we want the "you will own nothing and be happy" meme to become reality.
At a 20ms total round trip, that only buys you about a 1500 mile radius, again completely ignoring all other latencies.