The fluid sim doesn't look all that machine-annihilating. I'm not seeing a strong 3d component; for example, I'm guessing that you can't have sand under hard rock (IE cool some lava on top of sand -> solid layer of solid rock). Nobody's expecting to find lava tubes here. The water looks totally awesome, but it doesn't need all kinds of subsurface eddies; you're not tracking stuff like salt and freshwater mixing in estuaries for example, and you're not going to undercut shores...you're going to use a more visible, understandable mechanic. Why simulate something the players can't see and won't use? Sand collapsing down into dunes is pretty simple stuff.
The water looks *smooth*. Yes, it has a lot of data points. But not THAT many. It looks like an accurate simulation inside the cut-down physics that they choose to represent...and the water textures are a minor masterpiece. I would say that the big revolutionary part of their fluid mechanics engine was in choosing what parts to simulate and which parts to leave out, where to add detail and where to take it away, and it looks like they did a very good job in making those determinations.
Yeah, just like some outdoor places in Oblivion actually made me feel homesick for places I've been (that is one GORGEOUS game), I think this one will bring back the feeling of digging little trenches and building little berms in sand and pouring water through them. Won't be as accurate, sure, but it'll be fun to dink around with. And it's a game I'll have to keep my hypothetical kids away from, and drag them to the beach instead...