I’d love this. It would add another danger to the flight . When I started playing, I thought it was possible to collide with other airplanes & therefore was often instructed to increase/decrease altitude to avoid collision. I must say it was quite a thrill before I found out they just phase out when they get too near. Maybe only AI plane collsion? or players too? I guess if players can collide with each other ,we are gonna see players flying into other players on purpose etc 
As @geoffda pointed out AI needs to be improved first for this to work properly Improve AI Traffic at Airports and in The Air - #71 by TripsyTipsy
I guess collision with other players can remain optional,next to collisions with AI planes.
I was thinking that real damage to planes would be cool,like damage in carmageddon. While that would be so cool,in function of a sim ,realistic damage might not be something to put high on the wishlist.As that is not what this sim is about & isnt much of an added value for its current feautures.So that time might be better spent improving other aspects of the game.If on the other hand they would ever add Warbirds , it might do such a feature as real damage effects more justice. I must admit I came to FS because I was tired of all the violent games. So I’m happy as it is. But the lurking danger of collision does add to the experience & gives more purpose to requesting increase/decrease in altitudes etc too.