I honestly think making them all killable would be a dangerous thing to do, it could cause quests to break, but one thing I hope someone will mod in is so that they can be fully knocked out unconscious (like in Oblivion) and in that state they are sort of considered "dead" and thus they can no longer identify you as a witness of your crimes (It's not entirely realistic, but neither is them being invincible, it's a sacrifice for gameplay reasons). How it is at the moment, if you commit a crime you can get off the bounty by eliminating witnesses, but some wittnesses can not be eliminated so your bounty would only get higher because you attacked them. And because they have no "crown" showing that they are invincible, one might do this without even realising the issue.

Anyone think this would be useful to have?

Yes, that would make sense.

In fact, I kind of think it would be nice if, instead of just kneeling down, more NPCs were simply knocked unconscious, with a player option to just stab the body to make sure they're dead. Unconscious should also mean they stay unconscious for at least a couple minutes, at that. That way, not every person you fight would necessarily be killed, just knocked out and left for dead.

Much of the annoyance of essential NPCs is that they basically break combat by being functionally invincible and being able to continue fighting after only a few seconds of kneeling time. Putting them on the floor for enough time that they are functionally not a part of a combat for a while makes one of the major annoyances of the system disappear.

The game also needs to remove essential status from characters whose quest relevance is over (that is, at the end of their quests, like Baurus from Oblivion did).

There are some characters it kind of makes sense to keep essential no matter what, like Jarls so that you can't just murder every noble in the land without the game having any way to react properly to their entire central leadership structure disappearing, but generally, the game really doesn't need 199 essential characters in it.