I think the concerns for PvP are overblown because given how universal the lag is, it'd going to cut both ways, and even if the lag makes meleeing not viable, history has shown people are really quick at rerolling to classes that are effective in PvP. I can certainly see a lot of other issues with PvP in this game, but lag isn't one of them. At worst people reroll all to ranged DPS (which isn't even unusual in MMORPG for PvP), and the lag is consistent enough to affect everyone equally. That is, you'll win some due to lag but you'll also lose some to lag when you're the same base archtype (ranged).

However, PvP would make it very clear that the lag is persistent and not just a problem limited to a few guys.