Faucet, now that's a better "next gen" example. I've been using that method for years, for wrinkling clothing, but never in real time. Snowfly, most games that use bone animation support non-uniform scale, move, and rotate.
Seems like it would be nice to combine both bone and blendshape animation on each vertex. That could reduce setup time I think, if you could roughly place and weight to the joints, and create 'corrective' blend shapes for the poses. dunno, maybe it's just better to get the weighting right, but some areas may be easier to…