No, they did not. What they did do is extend the range of melee attacks, allowing a Monk to punch barrels from beyond the length of his arms. That's a fast and simple way to sometimes reduce the severity of the problem, but it's not the good way to fix it.
But what they should do is use latency to compute the origin of attack arcs to be temporaly consistent with creature locations. That's not exactly easy, but it's something that's been documented in the network programming literature for 30 years. Lots of competing games do it better. (Not generally MMORPGs, but FPS)
The problem appears to be that the player's game client sends a message for a melee swing at location XYZ, but by the time the message arrives at the server the monster has moved away from that location, since the network packet from your house to Turbine's datacenter takes time to travel. There are roughly two ways to deal with it (both involving complexity and herustics):
A. Multiply velocity times measured latency to use an updated position for the attack origin.
B. Keep a history of creature positions over the past 1-2 seconds, and search for hits using the historical positions that correspond to the time that the attack action was performed.
It's a fairly hard programming job, but it's something important for an action networked game.