My take..
Why peds:
OK it works without, but why remove, I mean should they go ahead and remove the trees too? They obviously supply immersion, and local AI peds could be density adjustable, 0-max.
0-evil function:
Make AI and User peds Invisible & untouchable dynamically way before collision, with the margin distance adapting to car speed (stationary car=nothing happens except User-ped gets blocked and AI-ped walks around).
This will remove the "fun" of even DISTANT chases on side-walks and also rid any graphical silliness inside the car.
Network:
* Global AI peds is probably way too hard, (maybe if strictly confined in path and timing), but local peds in an on-line game is good enough, and it would enable a "set density" choice.
* Adding 8 USER-peds shouldn't be a problem since there's only 8 cars +8 LOW net cost passengers if done right (doesn't send globally, only signs to the driver, and so mostly just receive).
=16normal 8light. Should be quite doable.
It's already like that now with loose objects.. (plants, signs, boxes, surfboards and what not).