See:
http://www.tik.ee.ethz.ch/file/49318d3f56c1d525aabf7fda78b23fc0/P2P2013_041.pdf
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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/