I am not saying lag doesn't exist. And I am not saying that it is common, or rare. I am just trying to point at how much 1% is represented in complaints. Out of the thousands of players, a dozen or so come to here to discuss the lag they face. 1%.

And that 1% is not a worthy roi to most stakeholders running the ship. Not in turbine, or wb. But in every company around the world.
Now on isolation, that is completely true that 1% in a group will look a lot more like 10% or 20%. However you have to know at the same time that if a clients nasty bug is being picked up by the other clients, they too may exhibit behavior from that buggy client. Part of the reason this particular beast has been soo elusive. It requires some very specific race conditions to be met to pop up. Unfortunately, it is race conditions that happen every hour because the buggy variables involved are commonplace in a game hosting thousands of clients on a distributed network.
To really determine if it is network related, all party members and actually all players in a server instance would have to perform traces and submit that data to reveal some pattern if it exists.
Personally, I think it is related to the bloat from limited spatial effects (auras). Too much to consider.