If there has to be a range, mobs shouldn't leash until 10-20 seconds of not being touched. It's ridiculous that something will just turn around and leash while being whacked on.

Personally though, I preferred the system XI eventually settled on. Never-ending aggro that simply despawned and respawned in the proper place after the person(s) with enmity died/zoned. No MPK, no trains through dungeons, and a world where you actually have to pay attention while traveling. Not to mention that it opened the door for neat little flavor mechanics, like losing aggro if you're out of sight of the enemy and run over water causing it to lose your 'scent'.