What are you talking about? The physics engine is awesome. Also, playing it with a bunch of guys isn't much fun. It's better to defend a bunker with three or four guys that are already in position and can't really do anything too horribly wrong.
Just reinstalled it, and ran into the same problems in the tutorial level that made me give up on it the first time around:
1) Trying to dig a dummy out of a hole, only to get repeatedly stuck on one niggling little bit of dirt that I can barely see and that my diggerbeam refuses to hit.
2) Robots (Robot 1 specifically) tumbling out of control and rocketing into the ground because I had the audacity to try to correct my flight path.
3) Not so much the physics itself, but a giant problem for me; the delivery rocket can be "controlled" like other bodies, which means if I try to change bodies while a delivery is in process (and God forbid off-screen) I'll suddenly find myself in control of a flying refrigerator. Yes, selecting away from the rocket does put it back under AI control, but the AI pilot is already trippin' on LSD and that split-second of confusion can send it into a death spiral.
I got every soldier I bought killed in zero-sum matches with those walking-trashcan things, mainly because they would fall into holes, drop their weapons and then stomp them broken, or aim all crazy because the mouse response is schizophrenic to say the least. I spent my last bit of gold on a dummy with a light digger, only to accidentally select to the rocket. By the time I switched back (about 0.8 second), it had toppled over, crushed the dummy, and managed to fly down the access shaft.
The combination of sloppy controls, terrible AI, and drunken physics make it virtually unplayable even in what's supposed to be the tutorial. It's good for a lot of cheap laughs, yes, but if I'm trying to win it's just plain rage-inducing.