Here are a few suggestions, that seem quite simple, although I have no idea how to create plugins or whatnot so It may be harder than it looks but here are a few suggestions: 1. Have pistons be able to push/pull already extended pistons, this will alow for things to be able to pop out of the ground and go back in because it won't matter the order in which the pistons retract. 2. Have pistons be able to push more than 12 blocks, this is for quite obvious reasons... 3. This may be harder but be able to like change how far a piston pushes like right click a piston 3 times and instead of pushing 1 block out push 3 blocks out etc. Lastly I don't care too much for this but make it like the old piston mod and have sand fly really high when it is pushed up, along with humans.
Besides #3 I've been thinking of making a Pistons plugin (I already have the template done) that will add functionality to Pistons including powering nearby pistons, moving extended pistons, and maybe even making definable "sticky blocks" that will theoretically let you make any shape out of these blocks and push the entire shape together with a single piston. Not sure how possible these are but I'll look into them more as Bukkit upgrades its piston API.
Nothing is impossible, but until Bukkit updates it would be very, very, hard. And there are glitches. @marinating that really sounds like an awesome plugin, amazing if you pull it off.