Yes that's an option. DM has several props with lower LOD materials; mostly with only the diffuse map and stripped all of the rest. The problem with that though is that the shadow side of the object will appear much brighter (with dark ambient settings) and switching from the higher LOD to a lower one can be painfully visible. Often I found that a high res imposter will do the job better in the optimization in T3D. Shadows for imposters can be set off, though it's either on or off for the whole scene ($pref::imposter::canShadow), having it per imposter material could be a good feature for the artist.Another is having a duplicate material on a lower LOD that just has the 'casts shadows' flipped off and the like.
(The quality of the auto generated imposters need desperately improvement though, but that's another discussion).
'Shadow Proxies' sound like a good feature to have; I totally agree. Perhaps even make it possible to use the collision shapes for that as well; which could do for particular props.
In large scenes, most objects like foliage and rocks etc. will be either brought into the scene via the forest tool or with groundcover (or procedural). It's already possible to turn on/off the shadows per groundcover object; perhaps it's an idea to do this for forest objects as well, giving the artist more control there.
With dynamic lighting and time-of-day you'd want to have the shadows drawn by the terrain to be rendered much further then 200m. T3D doesn't have the possibility to handle those separately, sadly enough, so solely depending on normals