your multiplayer examples of why this would be bad are wrong!
Those things would be awesome.
If some player got on a roof and took out the stairs, then eventually the other players would totally blast the shit out of that building. And if you blasted a hole that your enemy then falls into.... too fucking bad, hes in a hole, he can kill himself or you can drop a grenade for him.
Things like this would be great in a game sortof like Operation Flash Point or even BF2, super open levels so it doesnt matter that you can go anywhere. You dont need lame restrictions like magic walls and crap in mil sims like that.
Imagine at the end of the round, the level could be totally wrecked. It could start off like some nice urban setting with sky scrapers and stuff, and by the end its all like 9/11 ground zero, hehe.
I dont think any computer could handle that right now, but in a few years I hope.