So yes, PhysX is not bad on consoles performance wise and it would not be bad on PC if it would took advantage of multi core CPU's instead of concentrating only on nVidia GPU's.
Why do you think PhysX performance is bad on PC's? It's slow when trying to do stuff that GPUs can do but so is every other CPU based physics engine.
But I understand from where this decision is coming and therefore I think this API will fail sooner or later.
I highly doubt that running on a single core will doom an API. I'm sure many games out there only allocate one thread for physics calcs with other threads used for other things - AI, scene construction etc. The toolset, featureset, ease of use, extensibility etc are all more important than how many cores it runs on.