We first examine a system with a single source-destination pair and two relays, each node with a single antenna, and explore whether this virtual multi-input multi-output (MIMO) system can mimic a physical MIMO in terms of diversity-multiplexing tradeoff (DMT). We show that even under the idealistic assumption of full-duplex relays and a clustered network, the relay system can never fully mimic a real MIMO DMT, it is multiplexing gain limited. The limitation comes from the fact that source and destination are connected to relays with finite capacity links. We provide communication strategies that achieve the best DMT of this relay system. We extend our work to cover cooperative systems with multiple sources and multiple destinations and show that the same limitation is still in effect. Our results suggest that while cooperative relaying is able to provide high spatial diversity for low multiplexing gains, it can never mimic a physical MIMO for large multiplexing gains.