The barrel blowing up a wall is part of the map Blackout, which uses AMP. With AMP, you can have destructable entities and set hp, but they can't move. It's easy to make a map where destructables get respawned too.
The main performance problem with lots of destructable entities is lack of VIS, that is you will still need non-destructible walls fully separating areas or it will lag. Also the destructable entity will simply disappear, not leave behind some broken stuff (such things can be added with func_spawn). Making a large wall out of several destructables would probably just look strange.