Euphoria should be standard in all games these days, so I truly hope they're using it! I know they do play lots of games, like GTAIV, Red dead redemption and Star Wars Force Unleashed. So they must have seen these awesome features and though, "hey, we should use that in our own games!" We should do a fan interview with them that's got these questions.
No. Euphoria does not work like that, you can't have it in every game. Lemme quote something I said explaining how Euphoria wouldn't work on a game like TES for instance:
In RDR and GTAIV, Euphoria added realistic simulation to every bullet that hit the enemy, how would that work in Skyrim? I would be overpowered if every attack the enemy would start to move funny... As much as I don't want enemy sponges, every RPG needs some kind of balance so it can be balanced and make skills count without making the combat boring and frustrating.
With Euphoria, each hit would result in the NPC losing balance and falling. Which would become dumb overtime, however if we tweaked it to simulate these ragdolls only after NPC death or near-death, it wouldn't feel right.
I'd rather have something like Left 4 Dead's death animations, where the NPC falls executing an animation and then applies physics to finish the animation in a ragdoll way.
And, DMM is too CPU-heavy and it would fry our systems, plus it can't be implemented in such big scale that TES's games are.