I've been playing some Space Engineers recently, and I didn't get any sleep last night, so let's talk about the square-cube law. Keep in mind that I'm developing my own space-ship-game prototype right now, so this isn't necessarily commentary on what Space Engineers should do as much as me analyzing gameplay tidbits for future use.
It hasn't really been talked about much, but Space Engineers is really a game about the square-cube law. As your ships get larger, they quickly become too large to destroy. A fighter can be destroyed with one missile. A frigate with two or three. But even a middling-size capital ship can survive dozens and keep going - missiles are more of an annoyance. This is especially nasty given the relatively high manufacture cost of missiles and the manual reload required for fighter missiles. Antimissile systems are in the works, so that means it's going to get even worse!
Basically, it's unfeasible to blow up a capital ship. Aside from disabling missile turrets, it's clear that taking large ships is going to have to be done on foot.
There's a lot of flaws in how Space Engineer does this - for example, the best ground assault is to build a cockpit on the outer hull. That's a dominant strategy that shortcuts nearly all combat. Also, there are no subsystems or systemic failures - a large ship remains one completely intact ship except in the most astounding of situations. That means taking a ship can never be piecemeal, and is always all-or-nothing.
Anyway, there's also the ship after the battle. Space ships built brick by brick have a lot of emotional presence to them. Every brick means something. These are the crew quarters you build. This is the gyroscopic center, it looks cool. That double-command-bridge thing was an awesome idea.
Seeing those places shattered, walls twisted, pieces floating free - that's freaking amazing. I still say the most interesting part of Space Engineers is wandering through devastated ships, and I would love to see a game mode where you rescue survivors or look for dropboxes or something.
But, again, the redundancies and all-or-nothing nature of these ships make it difficult to get that kind of gameplay. Even after being battered to hell and back, a large ship probably has all the things it needs to be a ship - power, engines, gyroscopes, control chairs. Board a large ship devastated by battle and you will usually find all the lights are on, all the engines are raring to go. This gets more and more likely the larger the ship gets.
In both situations, the game would be a lot more interesting if the ship could be divided up properly, with various subsystems, actual pipes and wires, and the chance of systemic failure. Destroying all the engines of a decently-constructed capital ship is quite a task, involving saturation-bombing many areas of the ship. If you don't do that, the ship can still move under its own power. If you DO do that, the ship takes forever to repair because you literally have to build the engines from scratch again.
Imagine if you could knock the engines off-line by aiming for a power conduit. This would be a better situation all around. It would make combat against capital ships more skill-based. It would make capital ship designing more interesting with more tradeoffs. It would allow damaged ships to have systems knocked off-line and require players to route around damage or jerry-rig them back on-line. It would allow people storming the facility to break internal connections.
Required connectivity also allows for subsystem management - wire certain consoles up to certain things and that is all they can control. If some weirdo builds a console on your outer hull, they aren't wired into anything. Maybe use wifi to communicate without wires... but then you can get hacked by someone using wifi on a fighter nearby.
I would also argue that there needs to be more focus on shockwaves rather than blast radii. A missile completely destroys everything within its blast radius and leaves everything beyond that completely unharmed, with the result being that a tiny tick-bite is made. Instead, there should be a shockwave that spreads out from the contact point and deals partial damage to all nearby tiles with a dropoff rate as they are further away. This would allow you to knock components offline with a "near miss". Engines disabled in this way would go dark but not vanish, and you could feasibly repair them. The wider "hit" radius makes the missiles more effective, bringing space combat back to the forefront for another few size classes. It would also "spread out" ship designs, making sprawling, fluted, nacelle-based designs more useful due to shockwave negation.
Both of these changes (connected subsystems and shockwaves) increase the number of things that can go wrong and be repaired afterwards. This has the potential for a lot of fun in combat and in the cleanup afterwards. It also makes ship design matter a lot more, opening up a lot of more advanced tradeoffs. It will also give the inside of the ship more of a function besides "large empty space".
Anyway, the reason I'm considering this is for my new prototype, which involves building space ships out of bricks. I'm trying to keep an eye on the long game, with the idea that the game be fun in many scales. The square-cube law is an important factor. In Space Engineers it appears to crush space combat into a singularity. I think I can avoid that if I keep my eye on the ball. Moreover, the techniques used to bring the square-cube law under control can also provide gameplay at the smaller levels. For example, if you're in a scout ship and get hit by a micro-meteorite, you could suffer secondary damage to several of your tiles, then have a system failure that knocks your main power off-line. That'd be kind of fun.
The planned structure of my prototype involves missions. If you are in a small scout ship, you probably deployed yourself from a larger mothership with a specific mission in mind. You aren't struggling to build a mothership from a scout ship: you're struggling to complete the mission and return to the mothership for more resources and points. Because of this, the way you build and repair things is not the same as in Space Engineers.
You probably would not make any large structural changes to your ship, or put on a new engine. Your repairs would be limited to jerry-rigging, because your ship is task-focused. When you get back to the mothership, yeah, then you can refit and transform your small ship, or build a new one. This mission-based system means you will have large patches of time where you don't have access to your best tools, resources, or facilities. This makes your design (and the ways it fails) much more important, because it is 90% of what gets you through the missions.
Anyway, you can probably tell by how I wrote this essay, but I'm working on no sleep. So I'm done talking.