Sure, they claimed that, but it’s telling that nobody ever took them up on that.
Google’s internal network may be good, but it’s not going to be an order of magnitude better than you can get in any other datacenter. If getting thousands of people into the same virtual space were just a matter of networking, an MMO would have already done it.
A shard is going to be storing the position, orientation and velocity of key entities (players, vehicles, etc.) in memory. If accessed frequently enough they’ll be in the processor’s cache. There’s no way the speed of accessing that data can compare with networking speeds.
That doesn’t mean there couldn’t have been some kinds of innovations. Say a game like Star Citizen where there are space battles. In theory you could store the position and orientation of everything inside a ship in one shard and the position and orientation of ships themselves in a second shard. Since people inside the ship aren’t going to be interacting directly with things outside the ship except via the ship, you could maybe afford a bit of latency and inaccuracy there. But, if you’re just talking about a thousand-on-thousand melee, I think the latency between shards would be too great.