Just a quick idea that one of my friends made: simultaneous battles.
It would involve multiple small squares/circles/dojos as "mats", spread apart, where in each one, two players would go up against one another. If you are to land outside of the area you were placed in (including another mat) you would be eliminated. It could also function as a ladder; the victorious players would move on to the "next round", where it would continue up until there are two left, where they could fight to the death.
Another idea that I made, derived by the extra people battling at once, is team battles. Team battles, as you'd expect, involves 4+ players, equal amounts on each team, pitting against one another. Once all players on a single team are eliminated, or the time runs out, the team with the remaining players (or more points) would be victorious.
One final idea I have is "multi-battles". It involves 3 - 4 players, all against one another. This one could lead up to great chaos, and, other than the extra players, it would function as a normal battle. It could also be used together with the idea of simultaneous battles and/or team battles.
Been suggested many times, and was actually possible for a while, it however proved really buggy and slow.
Maybe eventually we'll see it but most not some time soon.
I am a huge supporter of this idea. The problems in the past came from lack of computer power. Now a days, computers are much better and can run about 100 times better than computers made 2-3 years ago. If this was to be added in the game, it would be smart to have a few people beta test the idea to see if it works ahead of time before releasing anything.
My main point is, mostly any computer/laptop that you have bought in the past year, or will buy in the near future will be able to support the game with more than 2 people playing at a time. If the problem lies on toribash's side then that is a totally different demon, and we must slay it soon.