Wasn't this all over Forza 3 (and very sadly removed from 4)?
Speaking of Forza, playing it for a while really makes me want to see developers get a bit more creative tuning. Pretty much all the games, GT included, like to place limits on car tuning.
It's most noticeable in three areas: weight, power, aerodynamics.
Weight reduction in GT is percentage based. This makes sense for certain things, but if you basically go crazy and tear down a car to turn it into a race car, you can certainly get around stock weights. Weight reductions should be divided into at least two categories. Basic and Advanced. Basic is the old system that is percentage based so that the original specs of the car limit how far you can take your weight reduction. Advanced would be basically be the equivalent of a race shop preparing a car for LeMans, etc. The minimum weight reduction would be about the same for all cars, no matter their original weight (of course there will be some differences, a Mini is smaller than a 599, so it's probably going to be lighter if the same materials are used, the 599 also needs a stronger chassis). Also, as Slip said, we need downgrades. Restrictors, debore, etc. Actually, downgrades should exist for everything, not just the engine.
For power, some attempt should be made at a thermodynamic model that would allow realistic responses to tuning parts. If that means some lowly station wagon is capable of hitting 1500 hp, so be it. Engine swaps also help with this, and there shouldn't really be any unnecessary limits on engine swaps (of course, some much exist, specifically cross-manufacturer swap limits).
When it comes to aero, both Forza and GT basically give all road cars the same generic wings that produce almost no downforce. It's really annoying. Street cars should be able to mount wings that rival race cars, anything from ALMS like wings, crazy Pike Peak unlimited class wings, or NASCAR spoilers. They should all come with realistic performance gains and tradeoffs. Leave it up to the player to find the best combination. Along with wings there should also be canards, splitters, diveplanes, chin spoilers, wheel spoilers, internal ducting, mirrors, lights (change pop up lights to internal lights), etc. This would take performance and visual tuning to completely new levels.
I know that software development can be difficult and time consuming, but I think some things are just progressing too slow.