The list of software synths using and expanding on this algorithm piles up pretty high and is still rising. Perhaps you don't hear the name a lot because most of these plugins don't explicitly say so in their descriptions and marketing (although many do). The more common term is physical modeling, which basically implies Karplus-Strong and more advanced delay lines, waveguides, etc. as underlying algorithms. For example, Applied Acoustics Systems has been researching and publishing this kind of software synth for maybe 20 years. Native Instruments has also made a bunch of stuff clearly using Karplus-Strong, including patches for their popular Reaktor synth. Heck, I've made plugins using this algorithm myself.

I find pure physical modeling has been stagnating though, hybrid approaching with sample-based synthesis seem more promising right now. This is what Sample Modeling has been doing and their results are impressive.

How does the performance of algorithms hold? I'm seeing all these old reports of how it's computationally difficult, yet can't find any performance reviews on new hardware. Not mentioning FPGAs or whatever else.

Lots of Karplus-Strong synths still around as Audiounits or VSTi's.

The wind synth was Yamaha VL1 - quite expensive at the time but very expressive. Not sure what happened to the patents on that, but there have been other physically modeled synths since then.

Stefan Bilbao's group at University of Edinburgh is carrying the flag on next-level physical modeling, though I think the funding for the project has come to an end unfortunately.

http://www.ness.music.ed.ac.uk/

There was cool work on physically modeled instruments done in Finland by Vesa Välimäki et al, not sure what the state of that is now.

Thank you for the comments, couldn't find any newer papers in the subject that advanced the methods.

Yes, it was VL1.