LATAM means LATin AMerica, not South America. It consists of American countries that speak Spanish, Portuguese and French. The division that Riot uses is Latin America and Anglo-Saxon America, not North, Central and South America, it is a cultural rather than a geographical division.
Brazil has its own server because South America is very large and dispersed (about 2x the size of the USA), and we cannot have a single server that can fully serve all regions because of these distances.
So the solution was to share: a server for Brazil, one for the southern portion of South America, and another for northern South America, continental Central America, the Caribbean and Mexico.
Remembering that the axis of highest population density in Brazil is in the South-Southeast-Northeast of the country, that is, the coast of the country, so our server is in São Paulo, the largest and most influential city in the country.
It is worth remembering that we are not Europeans, we do not speak several languages like them, so it would be bad for Mexicans to play on a gigantic server that speaks only English.