I think there are two things at play when people complain about lag in dungeons. First, is that the aoe's seem to decide if you are hit or not by when the aura dissappears as opposed to when the animation plays, causing the your character to be very far outside when the attack visually goes off and damage is applied. Second, is that FFXIV just doesn't seem to compensate for lag particularly well, and the encounter design does not seem to take that into account, leading to many people having to memorize patterns before hand so that they can start dodging an attack before it even begins. Both of these combine, make the game feel incredibly laggy. In the gif above, the person stepped out of the about 1 second before the aura dissappeared, but about 2.5-3 seconds before the animation played. It is bad lag, but the lag + animation offset make it look much worse.

SE's lag compensation could definitely use some improvement, but, I think just giving a little more leeway with dodge mechanics as well as synchronizing attacks so that they visually hit while the attack is checking for hits could go a long way.

Of course - maybe I just lag as well, making it seem like the check is done as the aura dissappears, while it is actually synchronized...