Many games have been fucked up hard by this approach, particularly in the RTS genre; where designers have attempted to fix a mechanic and their proposed implementations is actually a lot worse.
Starcraft (with SC2 & Expansions), Age of Empires (with AoE 3), Diablo 3 (prime example), Empire Earth (EE1 was the best), Command and Conquer series, etc etc
FPS netcode design is another one. The best FPS netcode to date is probably QuakeWorld which was engineered in '96? Seconded by GoldSrc ('98). All attempts beyond are worse, even though some designs (such as the snapshot model) are technically better, the hit registration is still worse, lol (other candidates are probs Tribes 1 & 2 and Q3 CPMA, which is a 'mod').
Josh is neither an RTS or FPS guy though.
An example is in FPS titles, the development of animation and physics making it possible for a player model to have more realistic movement, with more sway to various body parts and flinch reactions to hits - this is actually bad from a competitive perspective because when you shoot someone in the head and their model flinches, your second bullet (assuming using automatic weapon) will miss because the head is not in the same spot as it was before, and the time it takes for you to adjust your aim again gives the person who you just hit an advantage.