Interesting idea. While conflicts can be improved, I personally don't see it as a critical challenge with VCS.

What I do think is the critical challenge (particularly with Git) is scalability.

Size of repository & rate of change of repositories are starting to push limits of git, and I think this needs revisited across the server, client & wire protocols.

What exactly, I don't know. :). But I do know that in my current role (mid-size well-known tech company) is hitting these limits today.