It's not exactly difficult to add physics into a game anymore, all you have to do is hand over a lump of change to the developers of Havok and magicly you have ragdoll effects and objects that react realisticly. I don't think I'll be impressed by physics again as much as I was by Trespasser in 1998, though Half-life 2 at E3 2003 is pretty close. I'm still impressed when I see the effect, but it seems like developers are just adding cheap flairs to a game for the sole purpose of wowing people rather than for gameplay reasons.
Oh, and DVS, I think an Xbox game called Otogi has a bit of that geometry deformation feature. You can hit enemies into the ground and they'll leave a nice crator if you hit them hard enough. Not quite up to Geo-mod quality, but hey, we're getting back up there. But I think a Red Faction 3 with Havok physics would be pretty cool.