1) Real time physics is possible, the question is what is the scale, and how detailed are the models. IE, it is possible to have real physics applied to what is assumed to be a non-deformable body and later add in simulated damage. While not immensely accurate, it doesn't tax developer resources and keeps the dev team focused on game play.
2) Who cares? Real time physics in Cryengine. The same team that brought us ice spewing giant aliens is going to try to make realistic damage, while still neglecting story and basic mechanics. Oh yeah, this is going to turn out just peachy...
3) Where's the elastic deformation? I see plenty of plastic deformation during crashes, but no elastic deformation (hood, front grill, etc...). While a pretty tech demo, this isn't exactly going to win awards for its accuracy.
4) What is the point? Ubisoft has made it crystal clear that the PC is not where they are going to focus any effort. A current generation console hasn't got a snowball's chance in hell of actually rendering this. All of this begs the question, who wants this and why. What point does a pretty physics simulation have when it can't actually be realized.
So, I don't get it. Is this another excuse to forget about game play? Perhaps a nice demonstration for a grant proposal to study automotive collisions without actually wrecking cars? Maybe this is the old Crysis developers are focusing their time, after nearly committing mass suicide after experiencing the single person campaign of Crysis 2.
You haven't seen anything until you've seen this.
Wow! I didn't know the blue screen of death could get a blue screen of death.