The main limitation now is actually the atmosphere. As the air heats and cools, it expands and contracts. This changes the amount of air the signal is passing through. Since the speed of light in air is slightly slower than vacuum, the effective position accuracy is reduced.

There is a fairly simple correction, you need a static reference. If you have a fixed receiver, then pass its readings to the dynamic one, then you can correct for errors. Combined with inverse kinematics you can get sub centimeter resolution quite reliably.