I think this program has some problems with CPU usage.
I noticed that has some incredible slow downs some times, and it can't possibly be more complex than something like Gary's mod for Half-Life 2, which runs far better and is 3D.
I just ran your test and the lowest I hit was 13fps. Task Manager showed up to 67% CPU usage. Around 70% on core 0 and 60% on core 1.
The strange thing is, the simulation doesn't even have to be running for it to put a heavy load on the CPU.
This is a really cool program but I think the physics engine itself could be a lot better.
Something like this programmed with PhysX and GPU accelerated physics would be amazing.