I'm based in the uk and use hosting supplied for US business. The main reason is that UK bandwidth is slow and expensive. While the ping times to the US are slower, the throughput of data is higher and cheaper. Plus, of all my customers, only 6 are UK based. The rest come form all over the world not just the US.
wrt TOS. Well if your host goes belly up or scams you, then your only recourse is via the US courts. The UK consummer laws don't apply to pruchases form abroad. So if the host does a runner with your money, you won't have the same rights as if they were uk based.