From Diablo Wiki
Physics refers to a feature that game developers may use to add weight and realistic behavior to objects in video games. Blizzard began work on Diablo III utilizing the havok physics system, but according to Bashiok, they later dropped it in favor of developing their own in-house physics engine. Destructibles are enabled by usage of the physics system.
Physics as a Visual Component
As mentioned, physics engines in video games allow the developers to add weight and realistic behavior to objects in the game. This consists of things such as cloth moving or flapping in a realistic way during movement or in the wind, objects falling to the ground in ways that aren't pre-rendered or identical, wood splintering when broken, or a variety of other ways. In Diablo III, all of these aspects are present, but bodies are also included in this. It's generally referred to as "ragdoll physics" when the player can manipulate a dead body in a way that is at least more realistic than a pre-rendered animation.
Monster deaths in Diablo III are all pre-animated, but once the monster is dead, if there is a body left to manipulate, it can be manipulated, as seen below.
The Role of Physics in Gameplay
Due to the physics system in D3, it is unlikely to have spells or skills such as , or other abilities that depend upon having a corpse nearby. However, once dead, a body in Diablo III can be flung around by force, literally torn apart by critical hits, a frozen body can shatter, or the skeleton of a monster can be torn from its corpse and flung across the screen in gory fashion when enough force is exerted by the player. Since the removal of the PVP switch in Diablo III, and the fact that players won't be doing "corpse runs" to retrieve their items due to the new checkpoint system, player corpses can also be manipulated in such a way in the game-world by monsters and other player's spells and abilities, which will ensure that a good, wholesome time is had by all.
In addition to being generally perceived as "cool", these effects also serve as a visual indicator of how much damage and force a character is able to output.