Cloud gaming is crap and any actual gamer will tell you that. The niche of gamers casual enough to not care about playing over network latency but serious enough to pay real money for cloud gaming is microscopic.
Yes, but that majority doesn't need cloud gaming precisely because those games run just fine on their phone - there's no benefit in putting them in the cloud, that was supposed to be for fancy stuff where you need a beefy GPU for the eye candy.
Speed of light doesn't adhere to Moore's law :) and it's made worse by the fact most everyone connects via WiFi these days and it alone adds a few ms more.
I'm not surprised; you need a lot more servers and even so, there are a lot of places where something low ping times is difficult. While there is a lot of room for latency to go down, 1 lightmillisecond is ~300 km (~186 mi). This means that if a computer is 150 km away, 1 ms is the minimum ping allowed by physics, if I am talking directly to it.
By that yardstick, we've actually done very well in a lot of cases. :)