Yes, for some definition of 'low latency'.
Geforce now, shadow.tech, luna, all demonstrate this is done at scale every day.
Do your own VM hosting in your own datacenter and you can knock off 10-30ms of latency.
However you define low latency there is a way to iteratively approach it with different costs. As technology marches on, more and more use cases are going to be 'good enough' for virtualization.
Quite frankly, if you have a all optical network being 1m away or 30km away doesn't matter.
Just so we are clear, local isn't always the clear winner, there are limits on how much power, cooling, noise, storage, and size that people find acceptable for their work environment. So there is some tradeoff function every application takes into account of all local vs distributed.