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Over LOTRO's 17+ Years there was for most of that never work done to "Keep things within reason" for how everything was handled.
Imagine piling junk up constantly & never sorting it, cleaning it, etc. and how it becomes a burden to moving around, doing things with it, and an eye-sore.
That's LOTRO's "Lag". It's just the Game's Performance not having Consistent Performance Updates over the years.
Good news: They have been doing such Updates but they are small steps forward. They've yet to have a "really big Performance Update" that drastically makes things better.
Though, I guess thats to kinda be expected when SSG was having to compete with Daybreak's own MMO, DC universe Online. A game so heavily monetized, it wouldnt surprise me if Daybreak came out tomorrow and said that they were going to start charging players for every step they take.