Have you checked out Pianoteq? It is physical modeling and sounds incredible. It even runs on a RaspberryPi of you want.

When it comes to real instruments, Roland ships physical modeling in some of their instruments. They are a mainstream company.

So I think physical modeling is there but harder to get right than recording samples of piano keys being pressed. The results can be been convincing and it's nice that it requires little memory compared to sample based techniques.