This has been something I've been thinking about for awhile, but first let me preface this with me saying that something like DI is important; which is to say a mechanic that gives the defender something to think about while being combo'd and keeps them more engaged. I've seen some people say that you're supposed to sit there and take the punishment like most other fighting games... But that's the issue, this isn't like most other fighting games, combos can take a loooooong time to finish depending on who you're fighting against, and having NOTHING to do during that long period of time sucks. So yes, something like DI is important. But what else could replace DI while still allowing combos to be fun and engaging?
Simple, Killer Instincts' combo breaker system. It doesn't make what would normally be a sick combo fail to work, nor does it feel like the defender has nothing to think about during being combo'd. It would work like this: Attacker hits defender, defender gets a Combo Breaker button, while attacker gains a Counter Breaker button (possibly located where the DI wheel would normally be). The defender can look at all of the attacker's moves and decide which one to break by looking at the move and hitting the combo breaker button. If right, the combo is broken by both players getting hit with equal amounts of hitstun, thus returning to neutral (maybe add I-frames to avoid wizard shenanigans). If wrong, they are locked out from combo breaking for a short time, thus allowing for more freedom in the attacker's combo. Or, if the attacker thinks the defender will try to break, they can do a counter breaker, stunning the defender with a lengthy amount of hitstun alongside possibly some other effects (reset air options, reset knock back, reset damage scaling, etc).
The end result is the same effect that DI serves, which is a defensive option besides the nuclear option that is the burst; but without making combos feel strange. I would mod it in, but I know absolutely nothing about modding games, and I don't even know if something like that is possible, but hey, someone modded in wall bounce, so who knows.