Anyway, I feel that the best course of action is first to replace the current blastlet and flame particles with something better as soon as they can be safely modified. After that would be the time to modify the tables and code in such a way that one of several generic hull-damage overlay textures is revealed on the ship as it suffers damage. This texture obviously would have a glow map, specular map, and height map. The third part would be the most lengthy: getting decals to work again.
Of all the HTL models that I haven't made, exactly one of them features a custom drawn texture. I don't rate the idea of people going to the HUGE effort of making underlying damaged hull textures for ships as being much higher than say, geomod.

Additionally, that would mean another 3 to 5 large textures per ship, which is way too much cost to performance for the effect you'd get out of it.
The three stages I listed have the advantage of 1) being possible now, 2) being possible with relatively simple code modifications and 3) being already recognised as a long term SCP goal anyway.
Also, WMCoolmon's current model for debris is probably the best we'll ever get. Besides, post processing can probably make the ship explosions look even better.
Actually unless WMC or a like-minded coder beats me to it, I want to at least attempt to implement that hulk POF idea as practice for my Embedded C course at uni this semester.