I think they learned the folly of their chicken and egg problem. No dev wanted to pay for to use the physics since no one had the cards, and no one had the cards because no games used the physics. Plus, $300 was too much for the cards.
Apparently the physics are very good even without the accelerator cards. So, give the SDK away and devs will use it. Hey, free physics. So hopefully soon lots of games will use your physics solution. Now you have a bunch of games that can make use of your physics card...and you name drop to get people to buy the cards. "Hey gamers, think UT2007 is good now...with a PhysX card more things can go splodie!"