That's great and all, but nobody is talking about physical computers here.

Moreover, it's a useless observation in practice as well because the full exponentially-large state space necessary to represent such systems is not a useful formalism to approach computers with for any purpose, be it brutally practical or entirely theoretical. See https://news.ycombinator.com/item?id=23431703 for some previous comments I made on this, and some rough numbers base on computers that were already small 5 years ago and seem even smaller today. It is not useful to say "hey, that thing you're using has a finite state space and that finite state space is only 10^2,585,827,973 large!" It's not like you're going to run out.