When the old Blue Mars client used the individual downloads for each environment I always had to second guess the commitment and usually logged off instead.
What would improve immersion for me would be creating a more dynamic draw distance system. So that you can set the draw distance extremely far and not have such a massive decrease in performance. In game design on Unity for instance there is a fade in and out from dynamic to baked rendering based on the distance you are from an object.
Hypothetically, given that mesh objects can use completely different meshes for each LOD, you could hide the baked rendering in textures on a piece of geometry that only appears at a specific LOD. Similarly you can collapse interior geometry at a more distant LOD, replacing it with 2D textures, thereby reproducing the economic use of system resources we see in professional development environments like Unity. If you designed an entire sim or set of sims in SL in this manner you may be able to create environments that appear as massive and majestic as Skyrim.
The mechanics are there, we just need good design and (unfortunately) a significant amount of money to even experiment with these things at a sim level.