Making solid Custom Objects could be done, but it might be a bit heavy; you can calculate the collision mask the same way you do for Layer 3 tiles, but they're static. A dynamic collision mask that isn't hard-coded into the game could indeed be too slow for use. I don't know much about MMF though.
But concider, solid custom objects would be a ticket to wallswim hell. If you stand on a custom object and it changes shape BLAM! wallswim your way.
We'd have to be very cautious with solid custom objects. Remember: a jumping critter isn't really "jumping", it's merely disappearing from point A and reappearing at point B.
Meaning if Juni was to jump onto a solid CO critter which jumped, the solid critter would (in a way) "teleport" to Juni's location when jumping. No better than moving Juni into layer3 tiles with a shift.
Of course animation is the only case where this would be a problem but a CO without animation would be better of as a tileset. That is unless you need tiles on top of Juni, but then again it wouldn't be required to be solid.
My point: solid CO's will probably never be.
CO's which can kill on touch should be theoretically possible though, I guess