Purpose of GRE tunnels from a physical data perspective

Hey all.

I was thinking about this, and just wanted to get everyone else's perspective.

When creating a GRE tunnel, the two endpoints act as if there is a physical link between the two. The physical data travels across the physical topology though, so if the two endpoints are 20 hops away per se, latency would still be an issue correct? Aside from hop count, what would be the purpose of creating GRE tunnels from the aspect of how the 1's and 0's travel on the medium?