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If going by what Kazunori Yamauchi says he would like to see happen isn't trustworthy then what source is?
He makes the decisions and he is the one that knows best about what is going on in the development cycle. He isn't promiosing anything, but is saying that if they can get it to work properly then they can have it as DLC add-on. Why could it not be a downloadable add-on? It isn't as if we haven't had other 1.5+ gigabyte downloads before. He never said it would be a small patch.
Look, he isn't promising anything because it is not going to happen. Damage. In GT5. It simply isnt. At least he's learned not to promise everyone rocket ponies and happy endings with each successive game.
It's fine to say he "would like to see it happen"; so would I for that matter. Yet judging from history, and lots of it, it's not going to be the case. You dont just wave a wand with downloadable content and hey presto! there's a sophisticated, comprehensive damage model in a game that wasnt released with any hint of it in the driving model.
I'll borrow Clarkson's expression about ripping off my own leg and beating myself over the head with it if they ever release damage as an "update".