The latency of the game is probably not entirely Squares fault... I am pretty sure they have invested time and money into trying to make the game playable using the internet as possible...
Your connection can be slowed down by wireless routers that can get caught up with other wireless devices, Anti-viruses, your Internet service provider...
Square can't really tweak that to meet everyone's needs about latency because it is different for everyone.
I get disconnected when Im reading some text, or mid-fight, and I am pretty sure its on my end. My internet is decent and I can dodge indicators the majority of the time when I am focusing on what I am actually doing...