However what you are aiming at may not actually be where you see it. If it's another player or something critical to multiplayer gameplay, then you are going to see what the server has told you you're going to see at that location. And latency means that will be delayed. So you may think you have a clear hit on a target, but with latency the target may have moved and you haven't gotten an update yet. Or by the time your fire command gets to the server, the target has already moved.

This can get pretty confusing especially if the game does client side hit effects (like bullet impacts). You shoot, you see immediate feedback of the bullet hitting, but due to latency your target moved and you missed - so the feedback is false. But if you don't do the client-side hit effect, there's a strange subtle delay that feels wrong. Client tells server they fired, server determines hit location, server sends back "hit here" message, client draws hit effect.

Valve has a writeup at https://developer.valvesoftware.com/wiki/Source_Multiplayer_... which covers some of the issues with network latency.