Personally, I enjoy the changes that PhysX/Apex bring to games like Mafia 2 and Batman Arkham Asylum. While the physics isn't game changing/enhancing, the overall level of immersion and ambience is significantly impacted imo.
Having a gun fight in Mafia 2 and having impact debris from glass and other materials pile around you is pretty awesome, and a lot more visceral.
I can't even imagine playing either of those games without PhysX enabled! And I can't wait to see whether Batman Arkham City will implement PhysX as well..
If Batman Arkham City does implement PhysX, it will be awesome, even if it isn't game changing. Rocksteady will have had plenty of time to do a proper implementation this time, unlike with Arkham Asylum where PhysX was literally tacked on as an afterthought.
As for those complaining about GPU Physics not living up to it's potential, I agree completely.
But it's not Nvidia's fault. After buying out Ageia, Nvidia for a long time was the sole driver of hardware accelerated physics. Heck, is there even any actual games out there that use bullet physics yet?
The capability of PhysX has increased dramatically over the years since Nvidia ported it over to CUDA. The technology is certainly there. Just look at the demos on youtube, or even Nvidia's own website.
http://developer.nvidia.com/object/apex.html
The real problem is that developers are reluctant to use PhysX for anything other than eye candy physics, because they know it's a vendor specific technology that not all gamers have access to. It would be irresponsible for a developer to make a game that would have a completely different gameplay experience for Nvidia and AMD users..
So, the end result is that the evolution of hardware accelerated physics has leveled out, rather than continued improving.....at least for now.
Supposedly Nvidia will be updating the engine this year to include much better multithreaded support and SIMD optimizations, so it should run much faster on current and future generation CPUs.
With so many vying interests competing though, it's going to be a long time before hardware accelerated physics becomes mainstream.