Didn't Havok FX get canceled?
And yes, PhysX implementations have been bad thus far, but thats been because nothing has been created using PhysX first, just as an add-on layer. Backbreaker will be the first game truly designed with PhysX as part of its base engine, and will show exactly what PhysX can do.
We are fast hitting a limit on what graphical effects we can add without killing the GPU in the process. Its time to move beyond graphics, and start to implement fully interactive physics.