When I fight people with 3 bars. I'm 100% perfectly fine with that and I have a great time playing. 2 bars is even good enough, but 1 is certainly shitty. Overall I think the netcode is great, but of course can always do better. It has improved overtime since DOA4, so what else can you ask for?
My only problem is it's hard to find people in a match or whatever, but generally it's because there isn't anyone playing really in the area.