You have made me consider the destructable/deformable terrain as I would see it done in a MMORPG (some day).
One consideration which introduces limitations (which is a good thing to have) is that it (real world) takes immense forces to change large chunks of terrain (ground/buildings etc...). Dirt can absorb alot of energy... Concrete Ditto.
Have an explosion within a building and the weakest points get blown out first (windows/doors), with charring and scarring the other surfaces. So whole sections of 'the terrain' can be excluded from deformation effects quickly (leaving the processing to the bits that can be 'destructed' ).
Most carried weapons just dont impart alot of force (hmm... holes through materials as a 'deformation beyond 'decals') so are not likely to do the damage of your typical 500lb bomb (even when your guns effects are exagerated).
Real tactics then revolve around application of force against the 'weak points' (and even then often requires exact application to do a significant damage effect (like blowing in a door...) -- so an incremental game improvement is to allow destruction/deformation of the weak points in the terrain.
If they did, then standing NEXT to them when you fire can have similar effects on YOU. So range/scaling coarse vs fine detail of the damage done may allow an optimization (if the player never gets close enough to see any fine damage detail, then why compute 'fine' detail...)
Use of 'procedural programming' to generate damage patterns can compress the damage state which needs to be stored longtern (on the fly recreation when needed). Even if on initial immediate deployment to the player causing the destruction (full detail, matching their action's result suficiently) it doesnt mean that that exact state HAS to be shown to someone else later (just enough to indicate the activity took place - a hole is a hole, and one blown up building looks much like another, ESPECIALLY if YOU didnt do it...)
-
Depending on the game (ie- time span in a MMORPG) can the damage 'heal back', eliminating the special irregular 'damage state' data, allowing to go away with time -- saving data space and eventually simplifying the terrain computations in future (incremental and overlapping changes to the base terrain).
--------------------------------------------[size="1"]Ratings are Opinion, not Fact