Would be a whole lot more data to send per packet.
Internet speeds are good enough to send double precision numbers these days (it would really only be in position packets and the like anyway). The question is whether Badspot wants to go through and change most of Torque's code to use doubles instead and the answer to that is I assume a big fat juicy "no".
Sounds similar to a problem Minecraft has. There is a margin of error for different calculations which progressively increases over distance. Seems like a problem the game is having. Not sure if such problems are easily solved - but Badspot should be able to lower the margin of error.
I agree, obviously there's some margin of error that's compounding over distance. Doesn't help that floating point numbers are already imprecise as hell. Give this a try:
echo(1 - 0.9 - 0.1);