I am already skeptical that the GM mode won't become another day/night cycle which gets cut for being a lot more work than anticipated. But I am really skeptical about the idea of being able to "construct levels on the fly".

Even if it's possible, I'm not sure that would be fun to play. D:OS levels and rooms have lots of details and items placed. After you add your new empty room, what will the players be doing while the GM is spending 5-10 minutes adding in all the stuff to it? (Per room!)