I'm not arguing that my solution was perfect, I just think it shows that you can get quite far already with creative use of the available effects. I know there need to be new features to make this easier, but you are asking for some pretty sophisticated, almost 3D-engine grade lighting effects. Obviously it is great if we can support this but it is a great deal of work, and given our focus is on C3 right now we just can't spend a few months going back to C2 to work out how this kind of stuff can be done. We also have to balance this with the great many other feature requests we get in completely different areas, with people who also think their ideas are totally obvious must-haves, but we obviously can't do them all at once.
would it not be the best solution if the Shadow Light object produced an opaque layer with the falloff gradient already in place inside the object?
I don't like this kind of solution since it assumes everyone wants that. The current system is more flexible: you can avoid using a sprite and have infinite-range lights, you can use a custom sprite with a stepped/pixellated fade-out for different styles, etc...
Anything that'll allow me too use multiple light sources and many shadows without WebGL is all I need.
This is basically impossible. WebGL is a requirement for advanced rendering effects. canvas2d is very primitive in comparison and already effects like the penumbras with a shadow radius are only supported in WebGL mode. Why is canvas2d support so important to you still? As mentioned, we are likely to drop canvas2d support entirely at some point in the future, particularly because pretty much everything that people asked for in this thread is basically impossible to do in canvas2d, so only supporting WebGL opens the door to more advanced rendering features.