When I'm playing FPS games on dedicated servers, I make sure my ping to said servers are no more than 50ms max. I have a ping of around 170ms to the Texas based servers.
Also, saying that 200-300ms is the golden zone is rather laughable.
No, its not. Our game is not dependent on a fast ping rate. It is dependent on a consistent ping rate. I happen to know a bit more about how our connections work, than you do. FPS games are very different in how they work.
Informational updates are sent to and from your computer a a constant rate up to 4 a second. Thats 250ms. If you have a 10ms ping, you still only get updates up to 250ms apart and your computer only sends them at that rate as well.
It is the same as running a video with vsync disabled. Your monitor is only capable of displaying information at its vsync rate. Once you exceed that, in frame rate, you just do not see what a game would be generating. No visual difference whatsoever (aside form possible 'tearing' anomalies in the display).
The only difference ping time makes, when it is under 250ms, is the static position of each plane in each players "world". This is where the consistent ping comes into play. As long as it is consistent, the planes relative position updates will be nice and smooth. If you get a gun solution on your opponent and hit him, he takes damage and vice-versa. Like Lusche said, there is lag to get the hits to the player who got hit, but it works both ways. This levels the playing field. Remember, every player flys to position himself/herself realtive to everything in thier own world.
Are there occasional oddities? Yes. High speed, high G maneuvers can show placement issues, but that is more to do with the update rate than anything else.
To the topic at hand. The only gain to have a European based server would be for anyone in Europe and that arena would be on its own. To tie it to a U.S. server would not solve any problem with ping times.