It could, but I guess that works, since wads can be loaded and unloaded at any time, unlike with zdaemon. Still, some form of lms would be nice (as am alternitive to the way it is done in zdaemon currently, placing spawns in a seperate room and making the players go through one-time teleporters. This is something that cant be changed in dehacked.
(my thinking with sv_damage was something that works in the same way sv_teamdamage might, where it could be set to 0 (in coop for example.. er I guess teamdamage covers that))