The search horizon is limited by the number of hits, not geography. I'm not sure what the current # is, but a while back results were limited to 150 hits to cut down on unnecessary hits. Sounds like all is well with your results. Too bad more people don't share and stay online more.

If you use a more specific search string, apparently it gets passed on further until the 150 (?) limit is reached, and thus can theoretically search the entire active net.

I recall reading that there is a way ultrapeers automatically choose their hosts to try and get 'global' coverage. This may apply when you are running as a leaf too. Check the IP's of the connected hosts in your connections pane to get a better sense of this.

Someone who can read the code, like afisk, sberlin or trap_jaw could tell you more. Try searching for their posts.