[M T]

There is another issue involved as well - the fact that the pool lanes are not necessarily identical distances. In fact, FINA permits tolerances of up to 3 centimeters between lanes:

http://www.fina.org/content/fr-2-swimming-pools

You misunderstand.  A pool that measures 50.03 meters will measure the right length with touchpads installed:

For a pool to be included in the list [of certified pools] below,
all lanes must meet the “minimum” lane length requirement of 25.03 yards/meters or 50.03 meters
measured without touchpads.  The pools can be measured with touchpads installed
which makes the minimum length requirements 25.00 yards or meters and 50.00 meters. 

(NOTE: I believe they meant 25yards/meters + 0.03 meters.)

Pools are surveyed to much more accuracy, usually by laser. Each lane is measured separately (in 2 locations). You will not find a pair of lanes that differ by anywhere near that much.  For USA Swimming, gory details can be found here  Lane lengths are reported to at least an accuracy of 3mm (short course) or 5mm (long course).  The only actual certification survey form that I found online contained these lengths:
25.0261, 25.0307, 25.0416, 25.0391, 25.0412, 25.0409, 25.0374, 25.0433.  For this pool, the maximal variation among lanes was 0.0172 yards = 0.6".

For a 50 yard race, that 0.6" would represent maybe 0.012 seconds and is unlikely, but possible, to impact there results.  But for a 1650 (66 lengths), that adds up to 39.6", which is roughly 0.6 seconds.  For a 200, that particular difference adds up to 4.8", or roughly 0.075 seconds.

It's basically impossible for the pool wall to literally be perfectly straight without imperfections and variations, which is why times are only measured to 1/100th of a second even though technology permits us to be much more precise.

I disagree.  I'm not an engineer, but I expect that the placement of touchpads could be adjusted to 2mm accuracy across a pool width, with individual tuning and measurement by a laser of the other end.
My recollection of the early 60s (when there were some questionable results from human timing & judging, leading to the development of electronic timing) is that times could be measured to the 10,000th of a second, but the decision was made to limit it more or less to human perception limits.

[M T]

There is another issue involved as well - the fact that the pool lanes are not necessarily identical distances. In fact, FINA permits tolerances of up to 3 centimeters between lanes:

http://www.fina.org/content/fr-2-swimming-pools

You misunderstand.  A pool that measures 50.03 meters will measure the right length with touchpads installed:

For a pool to be included in the list [of certified pools] below,
all lanes must meet the “minimum” lane length requirement of 25.03 yards/meters or 50.03 meters
measured without touchpads.  The pools can be measured with touchpads installed
which makes the minimum length requirements 25.00 yards or meters and 50.00 meters. 

(NOTE: I believe they meant 25yards/meters + 0.03 meters.)

Pools are surveyed to much more accuracy, usually by laser. Each lane is measured separately (in 2 locations). You will not find a pair of lanes that differ by anywhere near that much.  For USA Swimming, gory details can be found here  Lane lengths are reported to at least an accuracy of 3mm (short course) or 5mm (long course).  The only actual certification survey form that I found online contained these lengths:
25.0261, 25.0307, 25.0416, 25.0391, 25.0412, 25.0409, 25.0374, 25.0433.  For this pool, the maximal variation among lanes was 0.0172 yards = 0.6".

For a 50 yard race, that 0.6" would represent maybe 0.012 seconds and is unlikely, but possible, to impact there results.  But for a 1650 (66 lengths), that adds up to 39.6", which is roughly 0.6 seconds.  For a 200, that particular difference adds up to 4.8", or roughly 0.075 seconds.

It's basically impossible for the pool wall to literally be perfectly straight without imperfections and variations, which is why times are only measured to 1/100th of a second even though technology permits us to be much more precise.

I disagree.  I'm not an engineer, but I expect that the placement of touchpads could be adjusted to 2mm accuracy across a pool width, with individual tuning and measurement by a laser of the other end.
My recollection of the early 60s (when there were some questionable results from human timing & judging, leading to the development of electronic timing) is that times could be measured to the 10,000th of a second, but the decision was made to limit it more or less to human perception limits.