I recall seeing this a long time ago, and it was very interesting, but I think the reason a computer desktop doesn't resemble a desktop anymore, is not because we can't... but because like Lukas said, it's pointless. If anything, we'd wish our real desktops were like a virtual desktop, because it's usually 10x easier to clean up, and keep organized.
Though I could benefit from being able to throw my documents around just for the hell of it... because I tend to break stuff if I do that in real life. Then again though, thats why little physics toys/demos like Line Rider exist.
Whats crap about that is the document still isn't in view. And WTF. Do people sit there with no applications open looking at a desktop? Files are on the desk because it streamlines work - the app is on the computer and does not need to be minimised or whatever. the only delay is the transition from looking on screen to looking at real documents. All that 3D desktop does is rotate and clutter to what a real desk looks like without offering any actual help to the end user.
It's Microsoft Bob all over again. Theres no increase in usability there. Jakob Nielsen is probably laughing at this right now.