Quote: "We will start to see more and more features like this in our models once we figure out how the scripting situation will be like for Reloaded. Since this would call for various animations, changes to the collision boundaries after destruction and the generating decals (smoke, dust, particle emissions).
"
You don't need any of that. All you need is simple physics. Animations are only for characters and weapons.
Environments don't need animations to collapse unless you want them to. You could see the simpleness in games such as Breach which you were able to shoot bricks out of the wall, one by one. Using Unreal Engine's simple destructible thing that I'm sure you can find on youtube or in UDK itself.
Sprites will come from the bullet impact which will show smoke and etc. Also scripting sprites to show smoke when building collapses on the ground to show the dust or whatever you want.
You're making it too complicated when actually it's a simple process.
Been playing Video Games since I was 3.