Guys, in no way can a CPU handle the amount of colisions the PhysX card can handle.
We're talking semi-realistic water, fog simulations... huge amounts of collisions. It's just not doable on a CPU.
You can do 3d without a graphics card, just on the CPU, but it's not in the same league... it's basically the same deal with hardware accelerated physics.
You can debate wether we need it or not, but it's hard to make sweeping statements that it's a rip off until you've seen the difference. GO to the physX site and lok at some of the demos before deciding it's useless.