Very interesting discussion. But one important aspect is still missing.
This aspect can be described with a question: "Do you play the game how it's author intended to be played?"
This question is very important in every game, because game is an art in which creation participates both game's author and a player.
When we talk about things like "game is not challenging enough" a context should be provided:
1. Game is not challenging enough because I am not playing how it was intended.
2. Game is not challenging enough because I am playing how it was intended.
Most of the time with X-com games 1-st context is present. So suggestions for situation improvement should be in line with "start playing how it was intended".
I hope I have delivered my thought...
The best option, perhaps, would be retirement. Because seriously, how many missions would humanity demand from its defender? Surviving 20, 30 missions is more than enough to be called a hero. An open-ended contract (implied 0% chance of survival) would realistically be very harmful to morale. But as of now, a kicked-out soldier is not even kept in the Memorial. It would be much more fun if you could retire a soldier with honors if his record would be kept in some "hall of heroes" of sorts. Because supersoldiers, too, get boring after a while and fresh blood is always fun - new names, new faces, new stories.
Interesting idea, but I would like to improve that. Retirement is too harsh. How about vacations? For example: if a soldier achieved veteran status (not to be confused with rank), then each day there is a possibility for him to be not available for missions. Not applied for soldiers in flying crafts.
About RPG... I am not saying RPG elements don't belong to the game... they certainly do... every game nowadays is a genre-mix.
Well, I am saying that x-com is definitely not an RPG game. RPG is all about different characters with different personalities and abilities that cannot be completely altered by a player. Pretty mush the only RPG related thing in this game is PSI-strength and that's all. All veteran soldiers are completely the same (except PSI-strength). Rookies are also the same. In X-Pirates mod rookies at least are very randomized, so it is possible to have good archer and bad shooter, but after a while this distinction nullifies.
I hope to see someday a mod that adds RPG elements in this game. For example, every soldier have some unique properties, but they are hidden from the start and only reveals themselves during specific circumstances (both at battlescape and geoscape).