I definitely agree with a lot of what you said, but I would like to respond to the part I bolded. I don't think a lot of people moved on to the PC because of GT5's physics, I think it has more to do with the racing aspect. PC sims always have practice sessions, qualifying, flags, penalties, tire pressure, and things of that nature and GT5 could definitely benefit from a lot of those things. I still think GT is the best racer on consoles at the moment (though I do really enjoy Forza 4 and some others as well) but I would love to have a mix of GT and some of the PC sims. Project CARS seems to be in the process of doing just that so I'm anxiously waiting to see what the final product is like.
Well you have a point. The racing in iracing especially is just better. In iracing you don't need to organize races or find a league to have great racing. That's what I love about it and why I wish GT5 actually had less options configurable in public lobbies or at least 2 types of lobbies, casual and simulation.
If GT5 had "simulation" lobbies (which would have heavy damage on at all times, tire wear on, cockpoit view forced, boost off, slipstream on weak, wet grip level to real, realistic tire choice, auto race start times and qualifying sessions) people like me wouldn't have to find leagues to have fun. Iracing basically has all that together which is why the racing there is of the best quality in any sim. It's because the safety rating, unforgiving physical damage, realistic physics, etc. all work together to narrow the field down to people that have a lot in common with eachother as far as racing goes.
So I agree with you, it's not just the physics, BUT I still think GT5 has so much to offer besides just online racing that I find the notion of "moving on" to be ridiculous regardless of which is better. I guess it depends what you are, a sim driver, or a sim racer. So I can understand a sim racer "moving on" to iracing or whatever but personally, I think they both have their advantages as well as most sims. Honestly though, that's actually my problem with Forza 4. I feel like other than great customization, and Fujimi Kaida (great track), it just doesn't have the advantages that I look for in a racing game and not just because it's a simcade game.
Everybody looks for different things in sims and games though so that's why people have such different opinions on any individual sim