scale is a necessary ingredient and running things at a physics sim level is just too taxing.
I once had an idea for a system that basically took in multiple video inputs and produced video output. Individuals would then run instances (that they could tweak) that were connected to a larger network. Somewhere between an MMO and Folding@home. Not only would it distribute the compute load but it would simulate the chaos of large numbers of individuals trying out different things.
Again I think it comes back to the fitness function and how things get nudged "upward." In any case it seems all you need to do is get fitness right and then let it rip...
Have you explored any distributed concepts like that?