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I don't believe that's the reason. It's a relatively new phenomenon.

If you region-lock your games, then people in Europe/Asia can't buy the cheaper North American version and play it locally.

I didn't mean to imply it's on the list of reasons. Just a side effect.

Multiplayer gaming, not esports. There aren't many examples of esports titles that are region-split, and for most esports titles 170ms still isn't a great.

For games like WoW, I imagine it could make a big difference though.

I mentioned esports specifically because it is often the case that a Japanese player must play a European player in an online tournament where low latency is crucial. However, in a non-esports multiplayer context the specific opponent and therefore their location is not as important. The matchmaking systems are able to randomly pick nearby (read: low latency) opponents, and games like WoW are regioned simply because of their immense scale.

Among other reasons...