Personally I feel the demo doesn't have much room for upgrades. Perhaps a "sticky" grenade or remote detonated device. The ability to pick up and reset pipe bombs would have its uses. I suggested the aa12 with explosive rounds , in that it would allow demo to engage at closer ranges. Explosive rounds can cause knock back and/or stun effect on zeds. It would add weapon versatility and functionality...
Did you suggest this? Or did you see it and bring it up? Cause that isn't your idea. Modded servers that I play on already have:
Explosive Xbow, (super fun weapon, explodes on a 2 second delay of leaving the bow giving it a maximum range as well as delay within maximum range.)
Explosive AA12 (fires ONE aa12 round that knockbacks and deals damage, hold 15 per clip),
C4 (remote det bombs that deal massive damage),
"new" launchers (MS25, RL that holds 4 rockets per clip that deal moderate damage, takes 2 rockets to deal with gores at lower levels, 2 for sirens at higher levels, long RL) (WTF Launchers are interesting in any game)
interesting effects on WTF M32 (deals more damage, less splash),
WTF M79 (fires a cluster bomb that explodes twice on delay).
A Demo magnum/revolver (6 shots) that fires one high-damage, insane recoil round with no splash, based on headshot damage. (Basically just deals "demo damage" without the characteristic explosions and whatnot. Boring, but the recoil and animations is cool)
Banhammer (Axe with a C4 taped on, when you whack with it, you deal very high damage to everything around you and yourself. Actually pipebomb damage, but it'd have to be modded for use for vanilla zeds. Because primary leaves you with a stub at the end, altfire brings up a new axe with another C4 taped on)
Self-Destruct, which would be OP in vanilla. (Melee weapon skinned as a red pipe bomb with skulls on it. When you throw it down, a pipebomb explosion dets around you and everything not Patty dies instantly. Including the user. Patty and Jr. Patty takes only 3000 damage)
There are other things that have been taken out as well, such as demo Flamethrowers (almost like a full auto chaingun of M32 nades) because they caused the server to lag, caused incessant noise/smoke, and otherwise didn't promote a fun experience for the players.
The M4203 was modded for that server, but I don't want to bore you with the details of that. I hate that weapon anyways.