I don't see a problem with physical separation. In fact, I find it a lot less stressful to cycle on dedicated cycle lanes. Motorists, cyclists, and pedestrians just travel at very different speeds usually and I think it would be smoother for everyone with separate lanes. I commute in traffic every day and that's fine, but I don't enjoy it much. Whenever I go cycling for fun, I try and find traffic free routes on dedicated lanes. Roundabouts are a nightmare for less confident cyclists (ask my girlfriend) and this seems like a much better take on it.
