That's one view of what happened. The other is that Regeneration is simply a liar and never had PhysX running on AMD GPUs. Most people (who care about it) seem to have accepted the latter option, including <banned_site>'s own posters. Regen never showed anyone his work, despite promising several release dates to a couple of people, or even showed one shred of evidence he had it working. It was simply his word, a string of broken promises, then a claim he was shut down.And then when somebody came up with a way to run PhysX on an AMD card, Nvidia immediately shut them up.
There are several reasons why he likely didn't get it running, particularly due to the significant architecture differences between NV's CUDA-enabled GPUs (GPU PhysX requires a CUDA compatible GPU) and AMD's GPUs at the time. Specifically, the code running on NV's GPUs didn't have a hell's chance of working on AMD GPUs and translation would have been a massive undertaking (turning scratchpad heavy code to register-based code and emulating other video driver services is not a trivial undertaking).
I'm pretty sure we've gone over all this before.