The Kinect and other optical systems have a number of drawbacks we considered when deciding on inertial sensors. Like you say, range and latency are issues, as

The Kinect and other optical systems have a number of drawbacks we considered when deciding on inertial sensors. Like you say, range and latency are issues, as well as occlusion, resolution of limb rotations, difficulties with multiple actors in one space, and general inaccuracies due to the system having to make a guess as to the actor's pose and position. While the Kinect can work fine for simple games, we wanted the user's motions in game to feel natural and fluid, and to be able to extract the whole body pose even if part of the user's body is occluding another part(e.g. hands behind the back, crouched down).