It'd be hard to implement player relaying because of router config, but using a relay is a good idea and infact LFS Spectator (gives a 2D overhead of a race) works off the same principle by relaying live info to a master server.
From a league server point of view this could just meen setting up a relay or two for the popular events, which many leagues can do with their existing bandwidth. Or perhaps by sharing a central LFS master spectator server like the way LFS Spectator works now.
One of the big problems with truly freeform movement is that more off-track area would need modelling, this would result in a dramatic overhaul of the existing tracks and lots of work on a seemingly less important detail, but having fixed location viewpoints with view rotation is a very workable idea and would involve little or no extra modelling.
One then has to ask, would such a system give you more than the current TV camera system. Bearing in mind you then loose the flexibility of camera zoom.
One of the major drawbacks of racing game replays is the sheer quantity of camera positions because they dont zoom to watch the racing, LFS almost addresses this now.
Where LFS still falls down (like most others) is that the camera follows a particular car, rather than the average position of a car and the one next to it.
An auto-director system would be good too, but this is hard to calculate in real time without using a live "replay" system, which gets very complex to write. In a race replay it's much easier because you can look at the heuristic calculation of events ahead of time and decide to move the camera early.
It's quite easy to do as a replay, but in a live event ... I personally would not want to code that.