The reason back then we didn't lagged as much even using slow modems was because the internet wasn't as big just yet (at least not for gaming wise) and there weren't all these ISPs routing our packets with their overloaded pipelines and overburdened machines.
To make the road metaphore which is so popular for this, we all had vagabond cars, however, we were the only ones on the road so we were free to roam around.
Now we got mazdas, however, the roads are so plugged and overly packed like NewYork in the middle of the summer, so we can hardly go anywhere anymore without crawling at turtle/snail speed.