It's not about the net connections, it's about the server bandwidth and processing power. Destruction is heavy duty stuff, even in engines designed for it (Frostbite). Unreal is not designed for it and so destruction of any sort is really quite rough on the server. Deformable terrain isn't something I think anyone can expect in Unreal 3, at least in any large scale games. Maybe Unreal 4, but it's hard to say, as the Unreal engine has always had more of an indoor focus than say CryEngine or Frostbite. Have to wait and see!