I think we might need Zak to weigh in here, because I still can't see how having physics objects move around and then settle to a fixed point, until the user picks them off, will use SO MUCH MEMORY that lower end systems will crash. I'm not opposed to being corrected either.
NOTE: I'm not arguing that the GRAPHICAL stress of rendering all those objects aren't a problem, I'm simply arguing the fact about the "memory constraints". The graphical stress is a different issue entirely, and I agree that on a GPU side it'd be stressful.
Zak's already demonstrated in the latest Livestream using the bowling balls in the bowling alley, spawning hundreds of them, all colliding with each other, moving around, mind you not networked, and there didn't seem to be any performance hitches or issues that at least I could see.
I understand that if a condo is filled to the brim with objects, and then you go an apply physics to ALL OF THEM, there will be problems UNTIL the items settle to their resting point, and then "presumably" they are saved to the coordinates they are at and the physics turn off again.
And on the server level, my understanding of game servers, the server isn't processing anything having to do with the physics, just their coordinates, which it already needs to know to display all the objects in the right place when you first enter the condo.