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Using a local area network (LAN) at the wire-speeds of Gigabit or even multi-Gigabit with trivial latencies is much faster that riding on a wide area network (WAN), which at best (OC-3 @ 155.52 Mbps and really expensive) is still below LAN capabilities.
However, you could still deploy a well-designed Point-to-Point T1, Bonded-T1 or T3 WAN connection -- which is more affordable -- and possibly use hardware-assisted NICs to offload the TCP and iSCSI traffic while still delivering an acceptable performance. If your T lines are Point-to-Pop instead, you may experience performance issues due to the nature of the connection.
IP storage applications that use WANs are generally for mirroring, replication, snapshot or DFS requirements that are part of an organization's DR planning. In the past three years, purpose-built appliances that accelerate and optimize WAN connections have provided a vast, high-speed cache along with intelligent algorithm to shrink the packets and improve the performance.
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