Just wanted to offer up a simple "Go for it!" here. This would be a great addition to the attributes module, though I can see it adding some complexity to the already "busy" attributes form. Once you've got a way to specify which attributes are dependent on what, you're going to need a menu callback that can return HTML for the new options. To bring it all together, you'll need to use Javascript to detect a change on the master attribute that uses jQuery's $.post() method to communicate w/ the site to get the new options. It won't necessarily be easy, but this kind of thing is happening all over the place (for example, zones getting updated when the country is changed).

I can't imagine this working well for situations w/ more than two attributes per product.