The insignia system would be a bit too labor intensive in more than one way, I do believe. Though, I like the concept.
I wish HTC would go to a more generic set of icons. I say keep the 6000 yards icon range, but instead of having it say "P51", have it say "1ENG". If it is a Mossi, Boston, 410, etc, then have the icon say "2ENG". B17's, B24's, Ju88's, etc, all would say "4ENG". Once the enemy contact is within say 3000 or 4000 yards THEN have it switch to what model of aircraft it is.
I think this would add a hint more of realism, yet not sacrifice game play or give anyone an advantage or cause a disadvantage to anyone else.