On that note, is there a way to measure how far is "too far?" If so, are we looking to have the cloud server w/in a certain # of miles; or below a certain ping time; etc.?
I ask b/c I recently stumbled upon a 'younger' cloud-hosting provider: DigitalOcean (aff. link). They're based out of New York, but also have data centers in San Francisco and Amsterdam. I'm located in Wisconsin, but I've been playing around with them b/c of their competitive rates (compared to Amazon, Linode, Rackspace, and others). Right now, I have a VPS w/1GB RAM and 30GB SSD for $10/mo. They also offer nodes @ other attractive price-points: $5/mo., $20/mo. (w/2GBs of RAM, 2 cores & 40GB SSD), $40/mo., and up.
At those rates, putting as many customers up in the cloud as possible might be great; so long as quality isn't noticeably reduced. Netcraft released a recent report that details the history of DigitalOcean's (non-aff. link) rapid growth in comparison to other cloud hosting providers.