I've been playing ESO on PS4 for close to 5 years, and I still see many threads and posts that constantly bring up "lag" and performance issues.
I've never had this issue. When I first started playing, I lived in Wiesbaden Germany (DoD civilian employee) and played on the EU server on my PS4. My PSN/ESO ID was komodozermike (damn that seemed liked a thousand years ago!!), and I read that the Zenimax servers were located in Frankfurt, which was only 20 miles away. I now live in Arlington, Virginia and I imagine the ESO servers for North America are inside the beltway around Bethesda.
Is physical proximity to the servers a factor? Will lag and performance greatly suffer if, say, I lived in Arizona and tried playing on the NA server that was over 2000 miles away?