Modern hardware introduces a significant amount of latency, its important to differentiate throughput and speed, a modern computer would crush a 2e in throughput a million times over, maybe more, but that doesn't mean its pipeline is shorter.
I see latency as a silent killer, of sorts. For instance, if you introduce a tiny bit of mouse latency, users won't notice the additional latency, but they will sense that their mouse doesn't feel quite as good. Give them a side by side comparison, and I bet most will be able to tell you the mouse with slightly less latency feels better.
This extends to everything. Video games with lower latency appear to have better, smoother controls. Calls with less latency result in smoother, more natural conversations. Touch screens with less latency feel more natural and responsive.
(I only have anecdotal evidence of this, but I am absolutely convinced of it.)
They are literally not. At all. You're way off. For anyone who cares about latency, you gotta be sub 50ms at least. For anyone doing generic not latency-sensitive work, maybe you can get away with 100ms, but that's stretching it.
200-250ms is the (purposefully built-in) latency with which an autocomplete may appear while typing. Not the latency for a single character or mouse click!
Where do you get 200ms latency anyway? That's a lot