You so sure? All the grapical effects SSG added? Bandwidth is the space needed to throw all those things into existence. Bandwidth allows for all that DATA to flow.
Yes. I´m sure. Graphical effects aren´t sent by the server.
Lets say you want to cast a fireball. You press your "Fireball" key, the keypress, your location, your selected target are sent to the server, the server now calculates if you hit, considers your enhancements, the mobs resistances, vulnerabilites, etc. - all of which is data that is already on the server. When it comes to a conclusion, it sends back if you hit and how much damage the mobs take, and likely the coordinates where the fireball hits.
How the fireball looks, is 100% down to your local graphic settings and rendered by your computer.
It´s a bit like the server is the DM, you tell him that you want to cast fireball and roll your dice, the DM now tells you what happens to the monsters. How that fireball looks in your head is up to your imagination.
Now this is speculation on my part: Lag happens when the server takes too long to determine what happens with your fireball. Maybe the game has become too complex with item effects, enhancements, feats, reaper points, tons of AOE effects, etc.
It´s like every time you cast a spell, your DM has to look up the rules and you wait for the outcome.