Only the Marine Corps and maybe Army really care about PT performance - from what I understand, promotions in the Navy and Air Force are based off of exams.
USAF cares quite a bit about PT, as they're using it as a force-shaping tool (a way to get rid of people as they downsize).
For years there was debate between the weightlifters and the runners in Air Force leadership over the best way to ensure a fit force. The runners won, which is why a waist measurement is now included in the PT standards.
In the Air Force you get a yearly Enlisted Performance Report or Officer Performance Report. Your OPR/EPR counts towards your promotion, and one of the sections of the OPR/EPR is how well you meet PT standards. Fail a PT test and you get a referral OPR/EPR, then you can pretty much kiss your military career goodbye.
