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As for your upgrade concept, that sounds functional but your implementation seems generic and almost superfluous, but I'm glad you're at least open to some kind of progression.Personally, I prefer my RPG progression to be full of hard choices and strategy. I want to be able to fail or to be very challenged by making poor choices. Also, I want to feel empowered by smart choices.I think it's relatively trivial to make RPG progression plausible, and I would probably do it through software/hardware upgrades much like you, but in a more elaborate and evolved way. Think Deus Ex - with exclusive and significant choices - only more of them.
I don't see why exclusive choices are better than freedom combined with a limited amount of points, the latter offers better build diversity, in Deus Ex the exclusive choices are often between a good and a mediocre augmentation, you might have chosen the mediocre augmentation (much later) if it didn't mean giving up the good one, but you never will given that it's an exclusive choice.Not to mention that nothing is supposed to be exclusive about hardware in SS1, everything is plug'n'play detachable and modular, not a nano-aug that is injected into the bloodstream and then can't be removed later.What I'm talking about gives you maximum freedom with minimum intrusiveness and retconning.
Also, I don't think they have to stick 100% to System Shock with a modular system. They could easily invent a reason whatever progression symbol or choice couldn't be reversed. That sort of thing is trivial - and the Augmentation system in Deus Ex could be easily adapted to SS.
Nobody wants to make mistakes, the Deus Ex and System Shock 2 teams certainly didn't, that doesn't mean you can't have a robust system that is more resistant to developer-authored mistakes.
For the record I wouldn't insist that these upgrades are all linear i.e you don't find V3 of a hardware because you get upgrade points to raise it from V1 to V3 instead, rather using upgrades on hardware could trigger deeper modifications or even some choices, it would probably be okay to permanently modify some hardware in a fashion if you can find that hardware multiple times.
They could (they can do anything), the question is whether they should.
Classic mode is a great idea - but it does mean having two separate versions of the game in terms of balance - which can be quite tricky.