Having messed around with tessalation for while at the start of last gen, the big issues for us were partly on the tool side (although that's largely soluable with time), but mostly it just didn't save very much in the control point count. We needed precise curves that matched model data, and we'd end up with so many control points in a mesh that more often than not we were just end up never tessalating the mesh.
Coupled with the cost of doing it back then it just wasn't worth while, to get rid of some silohette edges in close up replay cams.
I'd look at it again if I were doing a next gen title, and I had the time to experiment, mesh densities are higher now, but I suspect in the cases where your modelling real life objects you'd end up with the same control point density issues.
FWIW I've seen CAD data for a number of cars and they have truly massive numbers of control points.