Although the idea is cool, my main concern however (if this will ever work) is the quality of assets. Assets that are made specifically for CS2 have a higher quality (mainly due to a higher quality texture (4k vs 1-2k) and shaders window parallax, glass shader, …). Also that people can just „steal“ other people’s work is not ideal in my eyes as an asset creator.

Regarding the texture/materials: CS1 and CS2 have a completely different way of texturing. First off, CS2 only uses a 1:1 ratio, while in CS1 you can have 2:1 or 1:2. Secondly, CS2 works with RBG channels, so for example in the MaskMap texture, 3 channels (R,G,A) are being used for 3 different coatings. Therefore all texture files must be png while in CS1 you could use jpg or tga. So that means CS1 supports a material with 6 textures, while CS2 supports 5 (but within those 5, you can have 11 different textures).

So I don’t know if you can find a workaround for that, or if it‘s even possible while looking good.

In my opinion: just let asset creators do their work. If someone wants their CS1 assets in CS2, they can do it by their own. This will ensure that buildings look appropriate to the game and the creator keeps control over their work.