Can we potentially have a way to overwrite a material with another one? e.g. If I have a bunch of trees that have different green colours for leaves,  it would be good if I could replace the green2 material with green1 to minimise the number of materials in the output model. 

I think you can kinda do this already... if you assign one of the green materials to all of the other green surfaces and purge unused materials the others should go away?