I think you need low latency to make an action game where achievement is dependent on skill.

It doesn't have to be an action game to be dependent on skill. Consider Puzzle Pirates. Almost everything you can accomplish is skill-based, and most of it's even single-player (but cooperative by way of many people puzzling towards the same goal). Avoids most issues with latency (as do, I imagine, the relatively simple graphics), and ties advancement to skill.