[BrianG]

They won't suddenly not be effective after X distance, but they do lose effectiveness the further away from the ESC you go. The degree of capacitor effectiveness depends on several factors; distance from the ESC circuits, amount of current flow, and amount of ripple current. So, you can get good results even if the caps are "far" away if you lower the current and/or use batteries with lower IR. Having the cap bank at a less-than-ideal distance is better than no cap bank at all though.