Counterpoint is Roblox, which had one of the most innovative game engines ever. It could multiplayer simulate thousands of blocks of destructible terrain in 2006.
replyThis feature was mostly ignored by the playerbase because developers found it easier to create static setups and focus on iterating on other parts of their gameplay.
The technological innovation still needs to be fun, though. Red Faction: Guerilla (2009) had destructible buildings to the point that they were constructed by laying down blocks in a physically correct way and letting the physics engine handle the rest, and blasting the hell out of them in the middle of open combat was incredibly fun.
replyIt was very fun. Brick Battle, Galleons, the game with many towers. The explodey terrain put Roblox on the map initially.
replyThe problem is the opportunity cost of destructible terrain was too high. Developers could get fun for lower effort by creating linear levels with better design/graphics/etc as destructible terrain makes everything "blocky" without significant developer work.