several big leagues already use something like that, NDR events, RN, IGTC, SuperGT... for public racing kicks/bans are more appropriate... Also wrong way driving gets you spectated...
This could go awfully wrong - for example someone got lost lap for some reason to 3 drivers,but he is very fast,overtakes each of them,after overtaking car lap ahead you automatically got a blue flag displayed,even if you pull away,after he overtakes 3rd car = automatic DQ,and for what? Being faster than cars lap ahead? BTW,once I got a penalty for similar situation... (stupid Provost)
For this you have to create programmable definition of "crashed". Seen some videos of 1st lap in windy conditions,where more than half of field catches grass and spins (and triggers yellow flag to others),while none of them suffers any serious damage not talking about cars rolled,which should be a reason for red flag situation.
I believe red/black flags and their consequent actions still should be left to server/league/event admins to decide as automated they could do more harm then help.
Well, you got a point there. I think it would be difficoult for the system to solve that riddle. Maybe it would be calculated by contacts between cars that resultet to one of the cars beeing yellow flagged. Then again it would need to be some %'s of the start grid.
As much of the other functions in LFS - it would have to be optional
On random servers with many people it, as you say, would cause more harm than good.