The only reason the mini nuke is laggy is because lower-end computers aka hand-me-down 1990 office computers will literally combust trying to render this.
On higher end computers, it may be easier to render the explosion but the physics will be harsh unless the computer has a good processor.
Meh, my laptop cringes whenever the mini-nuke goes off, especially if it knocks down buildings... It's not only
really old computers that suffer, you know.
Though, personally, I would like it back. Recording it (in slow motion to get rid of lag, then speeding it up appropriately) makes quite a few epic video opportunities. It's also a nice explosion for certain screenshots, I've seen some really good ones using it in the background.
Just disable it whenever you're running a server.. :\