This does not sound like a good idea.
The problem with loading mods recursively is that you may end up loading dependencies you do not want to load. Yes, you can get around that with even more options, but why **** up a perfectly usable, simple and robust system?
First, it won't change the current system, because it'd pretty much add a self contained, new option.
Second, I assume mod.inis are made by modders, and that those modders know what they want to do. So, if, say, mod A depends on mods B and C, mod B depends on C and D, and mod D conflicts with A, then you simply can't use this feature to link mod A to mod B and load mod B's dependencies (because they include mod D). But it can easily be done the "old" way. It's up to the modder to tell the mod what he wants to load. Note, I'm not proposing any actual changes in loading, just a way to automate part of the process which is usually done manually. For example, BP2 could only list BP as dependency, and load mod.ini from BP that would tell it to load the current mediavps. In the end, this would be no different from the way it's now, since the final command line found in settings.ini would look exactly the same.
Now, I thought about using this so that all mediavps folders older than the current one would have self contained compatibility packages, each dependent on the current VPs. So, loading the folder Mediavps (3.6.10 and before) would first load 3.6.14, then apply the 3.6.10 package on top of that. Mediavps folder would have a special trigger, which would tell the launcher that if it's loaded, it's supposed to add Mediavps3.6.14 to the mod list. That way, there would be no need for altering the old mod.inis, the compatibility package could be optional, relatively small and easy to both automatically install and update.
There's one problem I see with it all. This system, combined with an automated installer/updater (Turey's installer would do the trick) would be quite foolproof on the user end, but fairly complex to implement and maintain. I could most likely try to lay the groundwork for it (the recrusive mod loading part), but the question is, does that even makes sense? I don't know if it isn't easier to just make a compatibility package as a drop-in VP and tell an occasional illiterate fool to learn to read and follow the installation instructions.
I don't think we should try to carter to the lowest common denominator. If the user's too stupid to grasp that the compatibility package is a troubleshooting measure, then what is he doing in front of a PC? Consoles fill that niche, and PC stuff (especially mods) sometimes requires actual thinking.