You're mostly right, but you're overlooking the software limits that exist mainly due to the limited bandwidth. If they upgraded the sites to a full T1 and tweaked the software a bit, they could give us new tilt-1 updates every minute, with about 15-60 seconds of radar-to-end-user latency, without major hardware upgrades besides the T1 interface itself.
Compare that to now, where we get only a single tilt-1 scan every 6 minutes, and that scan might itself be delayed by another 6-10 minutes on top of that. There are ALREADY several VCP programs that sample tilt 1 every minute... they just can't send out that data, and only use it locally for calculating their derived products, because they don't currently have the dedicated bandwidth to send it out.
Remember, WSR88D is kind of like an Atari 2600... it has very few limits that are truly "hard" and insurmountable. Rather, they're software-imposed in recognition of other limiting factors like backhaul bandwidth, or are precautionary limits imposed to guarantee that some specific product can always be fully-derived and delivered within some specific amount of time, or in a way that won't be destroyed by random errors. Many of them could be substantially improved with even minor hardware upgrades in other areas.
There are real limits to resolution imposed by scattering, wavelength, and particle size, but from what I've read, the current level 2 scan data is still throwing away about 30-50% of the nominal max resolution, and enormous amounts of theoretical resolution that could be recovered through oversampling. At this point, NWS doesn't even *know* what they could derive offsite from oversampled level 2 data, because they've never had the backhaul resources to even *fantasize* about streaming it in its full oversampled glory, or even archiving it all on site. 20 years ago, the idea of having 64 terabytes of on-site raid storage for Amazon/Google-like raw indiscriminate archiving would have been unthinkable, and never even entered into the equation.
The current scan rates are a compromise that tries to balance their backhaul against the need to track fast-moving storms like tornadoes. If they mounted a second, fixed-tilt dish back to back with the current dish so that every rotation produced a tilt-1 sample, they could alternate the back-facing samples between slow and fast pulse rates (so every other scan would be alternately optimized for range or resolution), and dedicate the front-facing dish currently in place to sampling the higher tilts (interleaving them to sample lower tilts twice at both PRF rates). Freed of the need to dedicate at least two full sweeps out of each volume scan to tilt 1 (because the back-facing antenna would sample tilt one every time the dish rotated), they could possibly slow down the rotation rate and use it to increase the resolution.
The closest thing I've seen to my idea was a paper someone at NOAA wrote about a year or two ago, proposing a compromise between fixed-tilt back-to-back conventional radar, and full-blown (and likely to be cost-prohibitive) phased-array radar 360-degree fixed radar. Basically, their idea was to build a limited wedge of PAR modules capable of sampling 4 tilts over ~1 degree horizontal, and mount it to the back side of the existing dish assembly, so that it could sample 4 tilts per revolution, and give us the equivalent resolution of 4-tilt level 3 TDWR every 12-15 seconds. The idea is that NOAA would then have a TDWR-resolution rapidly-updating radar source for tracking fast-moving/rapidly-developing storms off the back, and could slow down the overall rotation to get more detailed ultra-hires samples than we have now off the front dish.
The catch, from what I recall, was that they'd HAVE to decrease the RPM, and use 5.8GHz (like TDWR) for the rear array, because there just isn't enough C-band 10cm spectrum available to simultaneously broadcast 5 pulse beams without creating an interference scenario that would make their current range-folding issues look downright tame. They'd have to reduce the rotation rate to get enough range (TDWR's current short range timing has a range of about 50 miles, which is barely enough for most existing WSR88D sites to cover their own downtown areas, let alone outer suburbia in the direction away from the RDA).
Nevertheless, it's an interesting proposal. Going forward beyond that, the combination of PAR with tilt and rotation (instead of fixed in orientation) gives you the ability to do scanner-like oversampling. Increase the horizontal PAR width, and you can rotate it faster without sacrificing resolution, as long as you can do FHSS frequency-hopping from pulse to pulse. A distant echo will register at the far end of the sensor array as frequency #1... a nearby echo might register near the middle of the sensor arc as frequency #2. And so on. Eventually, when PAR technology becomes cheaper, the rotation rate can be slowed down. When you can afford to sense 180 degrees instead of 90, you can rotate half as fast. When you can afford to sense 360 degrees instead of 180, you can eliminate the rotation entirely, or rotate slowly to double your horizontal resolution at the expense of framerate.