It wasn't, though - updates were 'chunky' - you'd type a few words, and the other person would see them all appear at once. Even that little bit of loss of real-time destroys the illusion of a shared space.

Google Docs used to be like that, but Wave was capable of character-by-character updates. You would see updates in larger chunks if latency was high enough, but I've participated in several waves where I could see characters appearing one to three at a time.