The two things which let Oyster PAYG be the success that it was were, firstly, that an appropriate fare structure - with fares being based solely on start and end points, together with a start time differentiator for peak/off-peak scales (so start at time T from A, go to B (which would only be identified when you got there), fare is X) - could readily be introduced (this was perhaps the cleverest bit of the project), and, secondly, - as Oyster & PAYG was seen as the way forward for TfL - a decision (political as much as anything) was made that PAYG fares would always be the cheapest option, lower then the cash + conventional ticket alternative (with revenue impact being accepted). And as it was originally designed for the Underground, which could be seen as a central core (Zone 1!) with lines radiating from it, London's simple system of zones provided an easy - and easily understandable - way of setting fares.
What has complicated matters, and to a large extent destroyed the initial simplicity of the system, has been its extension from the tube to Overground and other National Rail lines - which has meant that alternative journeys not via Zone 1/Central Core are now common, extensions beyond the initial Travelcard Zones 1-6 - which has made the simple system of zones inadequate, and, most importantly, a decision that the fares for all these extensions should essentially be 'revenue neutral' from the previous complex (relative to Oyster simplicity) system.
So for a successful 'wide ranging' (NSE or National) PAYG - whether using Contactless or new generation Oyster to be a success, either there needs to be radical reorganisation of fares so that for a journey between any two stations there is a standard base fare (which can be modified based on time of journey, or 'privilege' of passenger (old, young, staff, etc)) - which, if there's an insistence on revenue neutrality, is going to mean massive losers and gainers; or alternatively a major rethink of how PAYG would work.