I'm not 100% sure what that guy is pushing when he says physics shouldnt be done in the realms of stream processing? Cos he's wrong!
Modern physics calculation techniques (and I can guarantee the VELOCITY stuff in that Infernal engine use the same techniques as Bullet/PhysX/Havok etc, a broad/narrow phase contact detection scheme with a slightly modified variation on a theme in terms of its solver, perhaps LCP based) either way, its calculations will be naturally highly parallel in nature. Ramming them all onto a few CISC cores on a modern CPU compared to passing them through 200+ "cores" (stream processors) on a modern GPU makes very little sense if you can do the latter.
Gotta say, the physics in that video looked pretty ropey too, they had characters literally running through tables and chairs and the tables and chairs simply going flying!! Whoever put together that physical scene had no basic concept of the mass of heavy wooden tables! Try running into a heavy metal framed chair and see if it goes flying?
Whats the point in using realistic physics if they arn't based in reality as we know it? Or were the Ghostbusters enormous metallic robots that weighed tonnes
EDIT: Also what is interesting is that they are insinuating that as modern physics engines "use the GPU" to do the processing, that it takes away processing time for the rendering process and thats why they have such nice shadows etc. Of course what they have failed to take into account there is that currently there are no physics engines which can accelerate the physics they are talking about on the GPU.. at all... so there are literally no examples of what they are claiming to be better on the CPU than the GPU in their engine being done on the GPU... I'd be very interested to see what level of parallelism they have introduced into their CPU based physics calculations and also how many ms each iteration of their physics calculations takes as well as the solver accuracy. I'd be willing to bet that in fact, all they have done is gone away and YET AGAIN re-implemented physics calculation code when libraries that do it as well or better are available for free.
I'm so glad OpenGL and Direct3D have been accepted as rendering libraries or we would still be at the stage where every engine insisted on re-writing its own rendering code also and every single one would claim to be better than the others (but wouldnt be)... Libraries people, libraries!