Hey there ! I completely agree with you, Arma is a wonderful game, and I really love it, and trust me I would love to see Arma with a physic engine like Euphoria, used in Grand Theft Auto series. But you know, Bohemia is not making it on purpose, they are completely aware that a lot of stuff are not as realistic as they could be, and if they are the way they are now, that's for sure because they can't make it another way.
First because you can't focus on everything, making an engine like Euphoria or the one used in BeamNG is fucking hard and takes a lot of time and money. They have to focus on the simulated physics, like bullets, infantry damage, ammunition used, side of impact, wind, and a lot of other things that i'm even not aware of !
Trust me, I've done a little of programmation myself, and players don't know how each little invisible thing of the game has his proper line of code. What the customer sees is only the content, so he can complain on why there are not many weapons or vehicles, but a program is much more complicated and detains so much more information than only visual content.
Second, and I think that's the real big deal why the physics are not as beautiful as for exemple GTA physics, (GTA car crashes are not realistic at all, but are pleasant to the eye, a car in real life would be crushed like an aluminium can) because Arma the way it is now take already a fucking lot of GPU and CPU power, because Altis is super huge and rendered in real time for all the players on the map, and textures are way more High Definition than other games. Integrating a new physic engine would burn most of players GPU cards nowadays and it would result in an even more laggy game with even more desync issues, and that's not what we want.
I think that Bohemia matter number 1 at the moment is multiplayer stability and fluidity, and surely a lot of their acutal physic engine bugs, no offense ^^.
Sorry for this huge post, just know that i upvoted your request, because I agree with you, I would really like to see a wonderful realistic Arma, in both terms of non seen physics like bullets and visual physics like vehicles crashes, but I think Bohemia is really doing their best, and they are not a huge team like most of the blockbusters video games teams, so they focus on the simulation, and not always on the visual physics. Though I think not making a vehcile explode by simple bullets is not really hard to do and i'm sure they will add this in future updates ! =)
Cheers !