What you are experiencing is latency. It has zero to do with lag compensation. This is one of the problems I have noticed on the playstation network. For some reason you get put into lobbies that are to spread out. Part of this is due to low numbers I would imagine. For instance, last night there was a player in the same lobby as myself. He lives in Miami, I live in Washington state 30 miles from the coast. That is the longest possible distance in the continental U.S. I believe it is around 3500 miles. A lot of times I get into lobbies where everyone is speaking a foreign language. Since they are not in a party as some will end up on my team I have to guess that they are probably actually in a foreign country. So on topic, without lag compensation you could not play this game online period. Players would be skipping around the map. They would NEVER be where you see them. So you would have to guess where to aim. Lag compensation allows you to aim at the player where you see them. The lag compensation is turned down so to speak on this game. As you may have noticed when you approach enemy and that player panic knifes you, on your screen 99 percent of the time you just drop dead. If you watch kill cam you will see them knife you. If the lag compensation was high you would see that knifing animation in game. Sometimes you notice that you just get hit like what seems one bullet and die. If lag compensation was higher you would get the experience of every bullet hitting you. Same thing when a sniper shoots you and you just fall down without the thud or hearing the shot. If the lag comp was higher you would here the shot feel the thud then die. Basically with high lag compensation you would see every animation like when the player shoots you and he doesn't even look like he's looking at you or maybe aim down sights. I hope you get the picture.
I am not saying you are a bad player but you may just need to keep searching lobbies until you find one that feels good to you. It sucks but as I stated I believe it is in the matchmaking and not keeping players in lobbies that are in their region.
As far as all those times you think you should have gotten kills I say the only thing you can do to know for sure is buy a recording device and play them back in super slow motion and count the number of bullets that you landed. Best way is to view one frame at a time look at where the sight is when the bullet ejects. You will have several frames between each shot. You also have to take into account different hit boxes produce different damage. Arms and legs yield less damage and it is not going to give you the benefit of the doubt it is where your site actually is close does not count. All this will prove in the end is the other player had a better ping to the host.
One more thing, although your awesome internet connection through your local cable company has a super bandwidth and super low ping in test no matter where you test your ping to, alot of cable companies throttle UDP packets which is what this game uses so it will affect your online experience for gaming. Sorry but there is probably nothing you can do except avoid peak times of internet usage.