Bandwidth is the capacity of a network to transfer data. Even though network bandwidth capacity has been improving over the years, the sheer amount of information that needs to be transferred has also been increasing exponentially. That said, this is the weakest of all the fallacies that can be assumed (that means it's OK if this assumption was made in many situations). 

Acknowledging that the bandwidth is not infinite has a balancing effect on solving for latency; that is, not going overboard with a few very large messages. The recommendation for both latency and bandwidth is to simulate production topology to figure out where one or the other needs to be optimized.