If you look at some of the Ruins that come with the 40K table top. Many of them are in ruins. The destructible terrain for buildings don't have to be OBLITERATED completely. They could just be skeletal frames, or space metals that survived even the harshest of bombardments.
I think that by physics you actually mean character animation. That's huge for me and most MMOs lack proper animation, mostly because of technology limitation, not bad animators or anything like that.