I think the problem is not that, but that the people using geolocating ips do not understand that there is "accuracy" metadata associated with it. Or maybe maxmind (or whoever is using maxmind) are ignoring the accuracy for that specific location. To geolocate someone with just an ip, you should never expect it to be more than "country level" accurate.

I can def see detective Jonhson trying to find child pornographer X with a warrant to get their location based on an ip. The company doing the geolocation might or might not tell them: this is the gps coords, but with an error of a few thousand kms.

Now, if the Arnold's ever want to do something "bad", their situation could've been the perfect cover up :-)