Isn't it green when targeting a friendly? Either way, first we need a way to actually turn it on/off. We don't have that yet.
It turned green when you had a clear shot at whatever you targeted. I believe anyone that played learned not to always rely on the targeting computer but to "use the Force," because it wasn't entirely accurate. I only used it from long distance and if there was a risk of friendly fire.
I prefer X-wing's solution to the FS method. It required thinking, and under pressure, you might hesitate to take that shot if it means hitting a friendly should you miss. More realistic I think. I don't think they do, but do real HUDs have lead indicators? Is there going to be gun harmonization as well?
I loved the way missiles locked on though in FS. I know sometimes in the X-wing series, enemies could be spraying you while trying to get a lock at the same time, which I always felt was unfair.