It is better than nothing...but it would be nice with some indication, smoke coming from engine or tires sound flat, hope you understand what i mean.I certainly believe mechanical damage is far more important than visual damage.
Yes, seems like only hope is GT7 and ps4.For damage, I think it should be do it well or don't do it at all. The current way damage works is terrible, with little scratches and generic dents on your car.