I'm revisiting this question again. I asked this several years ago and was told that it would be added to Sitefinity several times but it has never made it into any builds. Basically what we're looking to do is create a dynamic module that can be hierarchical in nature, so let's take Industries as an example. We could have several top level industries and several levels of children (all just industries so not a separate module called sub-industry because that's ridiculous and doesn't allow for several levels). Is there no way to handle this currently in Sitefinity without building a custom module (which we have but it is very inflexible compared to the dynamic modules). How we did it was every time someone creates an industry, it also creates a classification. If you make changes (e.g. move a child to a different parent) the classification also changes. This ensures that the integrity of the tree is always maintained (e.g. you can't make a child industry have a parent that is already a child of itself, you can't delete an item if there are child items, etc.)
It works great but we just feel like the dynamic modules should already be able to handle this (and have been promised several times that it would be soon). Can someone at Sitefinity comment on whether this will ever be the case or if we are stuck using (and constantly upgrading separately) our custom modules? Is there any way you can see doing this with the current infrastructure that we are maybe just missing (and please don't say by creating separate modules for each level because that is very inflexible, doesn't keep any real hierarchical structure and would make adding this as related data very cumbersome)? I believe this is the last piece to making the module builder fairly bulletproof and would love to see it implemented.