Wouldn't be smart, because it relies on every computer being 100% reliable, 100% fast, and 100% honest. It means you might have to wait literally seconds to get the results of the simulation from everyone.
It's also a lot of data. If 1000 bricks go flying, you're looking at having to transmit something like 32kb of data from every computer to every other computer in the game for every tick of simulation. Simulation ticks 32 times a sec so that's 1mb/sec right there. If it's a 8 person game, that's at least 8mb/sec of bandwidth that are needed - just for brick physics, nothing else. If everyone had that much bandwidth, you could simulate it all on the server and let people download it via their dedicated fiber optic lines.
Don't let me naysay you, though. You can get Bullet and OpenTNL and try writing your own system. If anyone can figure it out so that it works as well as the current system, I'd be happy to integrate it with Blockland. :)