Because it's a gimmick (objectively). The issue is that nVidia aren't using it properly, they are just using it as a checkbox feature to sell their cards.
They are effectively squandering the technology (at present). The PhysX effects in most games simply don't need a GPU to process them, the stuff in the Batman games doesn't need a GPU from a technical position. But the way nVidia have it working, they basically choke PhysX when it runs on the CPU to make it look like the GPU is so much more powerful and suited at running it that people will believe the hype and fall for it.
Fortunately, it seems they might be seeing some sense, because for PhysX 3.0 they are rebuilding the whole thing from the ground up to make sure it actually uses the CPU properly and isn't choked to using a fraction of its potential.
The point is really, what developer is going to seriously implement PhysX in to a game to the extent that it has a massive effect on gameplay when only those with nVidia cards can use it? Because of that, PhysX is restricted to gimmicky additions, but sadly they are usually at the expense of those who don't have an nVidia GPU.
They will make the "non-PhysX" physics look like arse, worse than it really should be to exaggerate how good "FIZZECKUSS" is.
nVidia don't want everyone to be able to run it either, no interest at all, it's all about sales otherwise they would allow people to use an nVidia GPU for PhysX even if the main GPU is an AMD/non-nVidia GPU, but at present they don't want you to be doing that so lock out the the functionality at a driver level. Basically if the drivers detect an AMD card, any hardware PhysX will be locked out.
There are hacked drivers available to overcome this though, but it's just more of an indication of nVidia's intentions and standpoint on "PhysX" itself.
nVidia does a lot to harm the gaming community and industry whilst pretending that they are helping it thrive with things like FIZZECKUSS and "The Way It's Meant to be Paid". Everything about nVidia is about being proprietary, locking you in to "nVidia" so you "have" to keep using their stuff, and that's just bad for everyone, even nVidia. They're sacrificing their longevity for short term gain.