I don't find the the S-1 switching system appealing at all. I just don't think that's the right approach to improving the sound of a guitar-- because I don't think it really needs to be improved. That has to do with my own approach to playing. With my Jaguar, I only play with the neck pick up, so I never find myself needing to mess around with that [though when I play with my Strat I do mess around with different the pick ups for noodling purposes].
There are active pick ups, Roland synth pick ups, and with some guitars there are pezio things, and then there is the Gibson robo guitar, and the Epiphone Nano Mag guitar. If you want innovation, it is out there-- you can shove all kinds of weird pick ups into just about any guitar you want. There are carbon fiber guitars, aluminum ones, and any sort of wood you can think of.
Now of course most of this stuff does not make it into a regular production line because there is not enough demand for it. The S-1 switching system, for example, only lasted for one year because there was not much demand for it. Same goes for the Jag-Stang and some of the other short lived production models.
The gold standard Les Paul sound is the 1959 LP. For Fenders, it's usually the pre-CBS models, and the No-Casters of the early 50's. The most coveted guitar amps come from the 50's and 60's and must have vacuum tubes for that ideal sound. A combination of this 50+ year old technology is the the basis for just about all rock music, but there ARE things out there that a person that wants to forge their own sound can do. Keep making your own path instead of asking Fender to do it. Here is a NSFW insane guitar amp to use (apparently Trent Reznor has one...).
