Interesting topic. Being the guy that has created a dynamic campaign for DCS I naturally have a big interest in the subject.
First let me say that I think that the Falcon 4 style campaign is the ultimate goal. This is not to say that it is perfect or has no room for improvement, but I think its overall approach to provide an engaging and ongoing environment to fly your aircraft in is the right one. One prerequisite for such a large environment is certainly the bubble system or gradual AI level of detail. Unfortunately ED has said in the past that they would never do a bubble system and prefer a world-wide full AI simulation (I assume this is a requisite of their military trainer branch), so I think it is impossible that we will ever see large scale war in DCS (it might also impose a limitation on the AI sophistication of individual units. Think more detailed sensor models for ground units).
Moreover, I do not believe that ED will ever create a dynamic campaign for DCS anyway. Having followed the company for the past 15 years, I think it became clear already a while ago that they do not have any real interest in a DC. Simply too much time has passes since a more sophisticated campaign has been cancelled during the development of Lock On, with next to no progress on that front ever since then. Some people claim that ED has continuously laid the groundwork for a DC, often citing the creation of the resource management system. I do not see this. While the ability to limit aircraft and munition (for MP only by the way) is a welcome feature, it is by no means groundbreaking. Many sims had this in the past, Il-2 for example, and calling this a step towards a DC is like calling having a shovel being a step towards building a house. Moreover, the resource management part is something that most scripters can write in an hour or two.
I am aware that Wags has recently talked about internal design documents for a DC, but at the same time it was mentioned that no actual work was being done to implement them (nor were any concrete plans for the future mentioned). I am certain that ED is not doing a DC due to lack of will and not lack of resources or technical capability, otherwise we would have seen something by now. Especially considering that it is not that hard after all. I am a LUA amateur and have no knowledge or experience beyond programming the simplest logic, yet I have built the “Guardians of the Caucasus” dynamic campaign in my free time from start to finish within 1.5 months. I am sure a professional, full time programmer could do wonders in one year. Considering all the stuff ED has done in the past decade, I simply cannot belief that they did not have the resources for this. I am sure that ED would love to have a DC in DCS like anybody else. But wanting to marry a supermodel and actually doing it are two different pairs of shoes.
So I do think that the solution lies with professional 3rd party or community implementations. Fortunately ED has provided some hooks in the scripting environment that can be used to achieve it. And while currently some unattractive workarounds are required, hopefully ED will improve these hooks for more streamlined integration into the game.
I think the key to successfully build a DC is not to try to do everything at once. To simplify things greatly, the scenario and mission types can be limited. That is the approach I took with my Guardians campaign, limiting myself to exclusion of a ground war, one side attacking only, the other defending only and the player only flying intercept type missions. That was the simplest possible setup I could come up with, while still being a realistic and authentic scenario with somehow diverse and interesting missions (intercept fighter-bombers, intercept escorted bombers, individual bomber night-intercepts, very high and fast recon intercepts). I think the results were quite good.
When people talk about a DC, they instinctively seem to mean a ground war with masses of tanks fighting each other. But this is also the most difficult thing to pull off. Even disregarding the mentioned problem of numbers and computing power (bubble required), to stage a realistic and convincing ground war even by placing units manually is extremely difficult. Generating this automatically would be the holy grail. Next to the technical problems this is also a challenging gameplay problem to solve. In a good campaign the actions of the player should have a noticeable influence on the course of the war, so that the player feels being rewarded for success and continued failures will eventually result in a campaign loss. At the same time, player influence on the game world should feel realistic and not gamey. But direct player influence on the ground war is actually very unsuited for that gameplay mechanic. Single aircraft have little impact, because blowing up a couple of tanks usually does not change the course of the war/campaign. So I think a DC should, at least initially, should shift away from the obsession with ground combat and CAS and concentrate on other missions which are multiple times easier to make and have a way bigger player impact, such as BAI, OCA, deep strike and naval warfare. Interestingly this also follows real world doctrine of application of air power, which mostly considers CAS a waste of resources and BAI and strategic strikes to be war winning (not considering the wars of the last 20 years, which had everyone doing CAS due to the complete lack of any other targets).
So I am very much in favor to disregard the complex and difficult ground wars and to concentrate on other scenarios. History is full of interesting examples of air campaigns that did not involve fighting on the ground: 8th Army Air Force bombing of Europe, Rolling Thunder, Linebacker, Beqaa Valley, first weeks of Desert Storm and many more. And this doesn’t even include all the fictional scenarios you can come up with.
I also think that a DC should be customized to a specific aircraft and its unique role and missions. DCS is bristling with different aircraft and helicopters from various eras. While this is a strength of DCS, this can also be considered a big weakness, because it stretches limited central resources (especially programming by ED). For a DC I think this means concentration rather than diversification should be done. Trying to write a generic DC that can accommodate all the different aircraft is bound to result in failure, as it wont to justice to each individual one. While certain elements such as mission generating or stats tracking can surely be generic, to overall design (AI configuration, briefings, “campaign flow”, victory/loss conditions etc.) must be customized to a specific scenario in order to provide the best possible gameplay.