The reason is that it takes time to transmit data across the internet. Data moves through the internet, generally, at 40-60% the speed of light so the further you are from your opponent and the HTC servers the greater the delay in your computer being told what they other player is doing. The term "ping time" is the number of milliseconds it takes for data to reach its destination, this is displayed on the screen where you choose your arena. If you have a ping time of 100 and I have a ping time of 150, that means that there is a quarter second delay between me making a move and the image of my plane making that move on your system. In effect, everything you see happened a brief time before your computer displayed it. In a quarter of a second at 450mph you will travel 55 yards.
not to be argumentative, but I believe your percentage is wrong, you say "data moves through the internet generally at 40-60% of the speed of light" for some reason I think that is way off, the speed of light is (without googling it) some where past the 660,000 miles a second.
well I was wrong 186,000 miles a second, still way beyond the data traveling through the internet, at 40-60%, say 50% that's 93,000 miles a second, I wish the internet was that fast, Lag would be a thing of the past.
the earth's circumference is 24,901.55 miles at the equator(yes Google) it would take about 3.7 seconds to go around the world once, traveling at half the speed of light, yes this would be a good thing

well good in the since that lag would be gone.