Arduino appears to be capable of direct-controlled bitbanging at 100 khz or so, and it can do its pre-programmed PWM at 1kHz.
We need 60 hz for engine control, so Arduino is well capable of engine timing.
For bitbanging, 3 microseconds is a minimum accurate time. . Thus, bitbanged controls get you up to about 300 kHz, which is fine for most induction furnace, power electronics, electronic fuel injection, and drone obstacle avoidance controls.