I'd certainly like to see dynasties in FE (or later, but as soon as possible) 
Dynasties and the concept of marrying off your successors with the idea of acquiring some benefits in the future, like alliance or even the whole other kingdom/empire were some of the most interesting things for me in the E:WoM. Sadly, the concept wasn't fleshed out in the most fortunate way, but the idea itself was great!
In my opinion, the best thing to do about the dynasty system would be to allow the succession with the heirs (at least for the AI if not for the human player) and as a few posters already stated if done in that way it would not go against Derek's philosophy and idea how the game should look like.
I'd even say that for the human player, the "problem" of succession could be done via some expensive spell (enchantment) which would transfer your "essence" into a body of one of your children if some prerequisites are fulfilled after your death, i.e. the spell is researched and active, you have suitable children (going into rpg area here, perhaps you should "tweak" or train your children in advance to make sure you'd be able to "transfer" - I suppose that you could do it only if you have a weak-willed child or if your magic power is extraordinarily strong -> so basically two different ways to go, maybe one for kingdoms, other for empires).
So, that would
a) ensure you take a very good care of your sovereign until you're ready with the "backup"
have the rpg elements in the whole story about the "preparations for transfer"
c) AI would have the possibility to continue fighting on after sovereign's death
d) give some practical meaning of fathering dynasties except for more champions.
I'm sure I could lost many more benefits of this system. The bottom line, such a concept would not go against the idea which Derek conveyed, that people play as "themselves" (as sovereigns) and not as their civilization.