The game has four damage types: Anti-armor (HE), Anti-shield (KE), Anti-hull (FRAG), and general-purpose (EN). There's no gameplay or game design reason to turn FRAG into Anti-Shield 2.0.
From my point of view a cloud of small metal fragments or small rounds would do almost no damage to hull and armor but they should do well against shields.
Frag already does minimal damage to armor. You're very wrong about small frragments being ineffective against internal components; spalling is frequently a big component of internal damage to vulnerable components in real life (such as machinery and, well, people). As far as anti-shield performance goes, well, there's no real-life equivalent to shields, so frag weapons can perform however we need them to perform.
I can also see some problems that could be created with this change. -snip-
I think that long list of additional changes that's required to make the original suggestion work (including introducing
another unrelated damage type) says a lot about the viability of this suggestion.