Well, ideally, it would be the only system - a complete replacement for the current system. Note that I don't anticipate each channel having an automation channel - there could be an arbitrary number of each, arranged in an arbitrary fashion. I know that my example doesn't really show that very well...
Another idea that I had was to have two viewing modes for this "automation channel" - the one that I outlined above, and another, graphical one. Imagine the effect visualiser thinggy over on its side. Because there can be multiple plugs being manipulated, each would have a different colour for its lines. For the sake of clarity, the node boxes could be toggled on and off, and the ones that you're not editing could be semi-transparent. Using a graphical representation like this would make it a lot easier to see at a glance what's happening to the various params you're manipulating during the course of a pattern.
With this graphical mode, you could theoretically resize its width to any arbitrary size (I'm using "arbitrary" a lot, aren't I? =P) That way, you could still see what's happening without spacing out your tracks much. And you could be doing everything in just one channel, over on the left or the right or wherever. I know that you could just pull up the effect visualiser thinggy on the other system proposed, but that has problems when you're manipulating multiple plug params within one channel (for example, changing both the filter cutoff and peak).
As another idea, maybe this "graphical" mode could actually collapse multiple automation channels into one graphical view. That way, you could see all of the automation in just one channel, again stuck over to the side or whatever. That could actually save space, because if you're using exclusively vst's (which I very nearly do), you could just hide the effects column (which I do, most of the time...)