This may be a little tl;dr, but I'm going ahead anyway.

Shooter games and driving games have refined and refined until they emulate the richness and intensity of action movie scenes, if not real life in some cases.

Fighting games... have not. They seem stuck in the 90's. This new MK game in particular, although it looks good, seems to want to placate by going backwards instead of forwards. When developers do 3D movement badly, the fans complain that "it ain't how it used to be", and so they give us back the limited plane fighting of old. MK isn't alone here. Street Fighter did this too.

The thing that bothers me the most, and prevents the fighting from reaching the richness and intensity of a Kung Fu movie fight is the juggle heavy fighting that we seem fixated on. Another thing born in the 90's, but really, it looks pretty damn goofy looking. I don't want to see fighters bouncing each up into the air and keeping their opponent's helplessly propped up against gravity with various pokes. It looks really stupid to me, and yet almost all fighting games insist on it. MK in particular has its entire custom combo system dependent on this. Although I guess this is as much a problem with combos in general, rather than just juggles.

Another thing is the invariance of the moves. Even 50 basic attacks would get old, especially in a game where only a dozen are viable in high level play.

Now I'll get to the point.

I think what is needed is the end of combo based fighting, and the start of emergent, physics based combat without dead end situations. By that, I mean that EVERY single move can be counteracted by the opponent, and vice versa, building up a back and forth trade of emergent consequences that mimics what you see in a Kung Fu Movie.

We already have the technology to do this. The engine used in GTA IV, for example, creates a skeleton that is dynamically affected by the physics rules. This means that you can generate a vast array of variance without need for programming of set animations. This can be applied to fighting games too.

I know what you're thinking - physics based combat would turn into an unbalanced button bashing mess in which you wouldn't have control over what you want to do. I beg to differ. This is a challenge, but assuming the base of the combat allows you to be strategic, within the physics, then it can be done.

In a normal fighting game, there are often parries, but they are very stand alone. In a physics based game, it's possible if your opponent say presses a left punch button, and you press ANY limb button within the right frame window, your character will attempt to counter, and then in turn your opponent CAN COUNTER THAT COUNTER, and so on, adding absolutely insane variation, and much faster combat to the proceedings, since the characters have physics affected skeletal movement, and their movements change dynamically.

Would there be strategy? Well, yes, but it would be based upon learning how the physics affect moves and counter moves, rather than learning the best way to get the opponent in a gigantic juggle.

One thing that shouldn't be a problem again would be infinites, since you should always have a dynamic solution to a trap. Even assuming that the rules engine includes stun attacks, much like Scorpion's spear, a simple limiter such as is already in play in MK9, would assist greatly. In all other situations, the very fact of always been able to initiate an attack irregardless of the circumstances, free from animation constraints, makes it much less likely for there to be an oversight for someone to exploit to create an infinite chain. Especially since the idea is to get away from combo based gameplay.