Voxel game engines like Ken Silverman's Voxlap (http://advsys.net/ken/voxlap/voxlap05.htm ), Infiniminer, Minecraft and Lego Worlds have a dynamic game world where everything can be changed. It's resource intensive and choosing the optimial world data structure is very important (avoid rendering invisible parts, infinite worlds, LOD). And integrating realistic infinite physics is too resource intensive. That's why you see little and only local physics.
From the graphical point of view the new Lego Worlds engine is really fascination! It seems it uses advanced geometric shaders to render all the tiny Lego parts on the fly. Does anyone know how it really works and which data structure it uses?
I even think the game doesn't have to be 3D - Terraria like world would be good fit too, if done right (probably allow several different layers at each tile - like background wall, plumbing and ambient layer for fluids).
Real infinite physics like draing a water dam and flooding mines is CPU intensive (there are such mods too) and changes the gameplay (reversing a flood means pumping out the water). In 2D it's a lot easier and several such physics playgrounds exists (even with basic fluid physics). E.g. Phun (https://en.wikipedia.org/wiki/Phun ) and some games based on 2D physics engines like Box2D.
Actually, there's a game about building factories and automating the hell out of it.
It's called factorio.
But admittedly, it's not realistic, not even close. But I do spend the vast amount of my time thinking about logistics.
What I would like to see from the game is less focus on how are things laid out in space (that's a different puzzle) and more focus on what crafting materials to use and what their different tradeoffs are (physical and chemical properties, cost, processing complexity).
I also had an idea similar of yours, maybe by stringing together some open source simulation package into a sandbox environment it could be achieved.
I really like to play with mods, especially the tech ones, I enjoy building automated processing systems and factories and bootstrap myself in the style of "The Mysterious Island". Here's a game I really wish would exist (and I think it will, eventually):
Realistic sandbox game based around technology and history of technology. De-emphasize the kinematics, and emphasize other types of physics such as statics, thermodynamics and electromagnetism, and also chemistry, material engineering, biology and geology.
Imagine a game where you could learn about almost any industrial process (including historical ones), ranging from agriculture through chemical engineering to computer-controlled 3D printing.
I wouldn't mind complexity too much. There are people who enjoy flight simulators which are quite complex. It should capture the spirit of common industrial processes, within the first order of approximation.
I think this would be a great game to understand how the modern world is built, on what basis, what it takes for economy to operate. So it would also be very educational in the economics aspect (actually changing focus from money to production would help people to understand economics a lot better).
Current Minecraft is not there though, even with mods. The basic physical laws are not preserved, and often realism is eschewed. It's quite hard to make such a game, because people who know the industrial processes well enough are rare, but I really wish it would exist. And I think it would be highly educational, but mostly in fields of natural sciences and technology.