http://www.tik.ee.ethz.ch/file/49318d3f56c1d525aabf7fda78b23fc0/P2P2013_041.pdf
Quote
each kilobyte in size costs an additional 80ms delay
You can calculate the "orphan cost" of including an extra 1kilobyte of transactions in your block from that, which gives a floor on reasonable transaction fees.
RE: can we decrease that delay: sure, up to a point. But across-the-world network latency gives a physical limit.
See, for example:
http://www.verizonenterprise.com/about/network/latency/