Deus Ex didn't have full "the cube can rotate" physics but it did a lot to move this kind of thing forward. You can totally throw a can of soda at a cop.
And Splinter Cell (2002) had curtains that moved around you as you passed under them. Many games had individual features that were innovative physics-wise, but I still think HL2 and Doom 3 were the big mind blowing ones, both for me personally and the media coverage at the time.