Heck, you could probably FRED a mission where the worse a ship is damaged, the ickier the textures.
That sounds like a great idea. I've always hated how most games don't have this feature. If I remember correctly, there was this Mechwarrior rip-off called Gnome that had numerous 'damaged' models that popped up whenever you shot your enemy enough times.
@Brandx: I've no idea how this game will turn out just from seeing the gameplay vids, but the idea of a one-hit kill sim game kinda scares me. Its bold, too bold if you ask me. The only thing I can think of to counter this is to make the ships exceedingly difficult to fly and stir, feature jamming systems or anything to make gameplay harder.