I think chain-exploding would be terrible under the current system. However, I think the current system for power grouping is stupid. Right now, it's just about getting maximum box size of each group and as long as you have at least one group that's large enough, you hit the soft cap and have essentially not lost anything. Power hits the limit way too fast with way too few blocks compared to the amount of blocks in the ship since you only need a linear increase in power blocks for a cubic increase in ship blocks.
A system in which chain explosions could work is one in which adjacent power blocks connect to form a single reactor. Each reactor's output would be completely independent of any other reactors (no extra power from having multiple groups) and only based on mass, not on box dimensions. Total power would scale superlinearly with mass (not quadratic, but above linear).
You could make really long reactors right now, or boxy ones, or even psuedospherical ones. When one part of the reactor is hit, it would distribute most of the damage to adjacent power blocks, thus giving it effectively more HP. Once a power block is destroyed, it would explode and damage the nearby power blocks. Thus, when one block goes, it will probably take out the nearby damaged blocks with its explosion, but not (if things are properly designed) the whole reactor. Additionally, because reactors scale superlinearly with mass, it would be best powerwise to have large reactors that might get blown to smithereens once the attacker drills in, but better battlewise to have many small ones that don't provide as much power, but contain the damage from being hit.
The best part? Current ships would not become unusable, just more optimized for power over survivability in a more extreme way than currently (it's already better for survivability to have many smaller reactors).
