Sure, it's possible. Still, it's not like whatever you see in X-wing isn't incredibly primitive, so doing something that'd otherwise match the visual quality of FotG would require a heck of a lot of work and all sorts of bizarre trickery. The engine's not exactly built to support things like that out-of-the-box.
Well, I once tested a proof-of-concept version you made. Not an entirely flawless implementation, and could use a better model set, but I liked how it ran.
I might still have it, actually.
Indeed, the biggest problem is getting a FoTG-quality Death Star. I once toyed with an idea of an AU campaign involving multiple superbomber raids (not by Rebels, it introduced a few new players into the war) against DSII's important points, like hangars, superlaser and Emperor's tower. The mission concept turned out to be completely unfeasible due to sheer size of the thing. Even just basing the player off Death Star (which I also wanted to do) would be rather hard to do well. If I ever return to the idea, I'll probably end up splitting the DSII's role between Executor and Eclipse, with anything involving DSII happening in the background/behind the scenes. FS engine isn't just suited for objects that big, especially if they're supposed to interact with the rest of the game. Inferno did have a huge Earth in back in retail, but it was just a prop, and you weren't getting close to it.