I can't remember what plane/s it was, but several had a problem with the oxygen heaters. Some of the problems were fires caused by the heaters, or the heaters going out and oxygen system freezing at Alt. But I think those problems were pretty much solved by late 42' early 43'. Be that as it may, Hypoxia would rapidly impare your judgement and coordination at any Alt above 12k. And this is further magnified by the persons physical conditioning (ie. smoker, drinker, wich most aircrews did both after a mission) as well as their mental state.
But at any rate, most of the dog fighting is done at 10k or below in the MA, so the lack of Oxy in the damage model would be irrellevant. But it would be an a nice addition for the Buffs and interceptors at Alt. This could be further extrapolated to include damaged systems at the individual positions ( ie. damaged oxy at the tail position would cause blackout, while the other positions would not be affected until they are damaged ) in the case of the bombers, like the gun damage is, but separated from that.
Anyhow, I think this is likely to open up a new can of worms (whines) and would best be left out of the model for the time being, until some of the other issues (gunnery models, flight models, and other problems) are corrected first. I would rather see some work done on new maps and better scenery, but that's another story.
Either way, I still say this is the best online game/sim that's out there (even with all the little nit-pickens that it has) barre none.