Current paper tickets are definitely due an update.
AIUI the main issue right now is a standoff between the mainline railway and TFL.
The mainline railway has introduced a new format for paper tickets known as "paper roll tickets" that are printed on thin paper with an aztec barcode. As a customer I hate the things but I acknowledge their advantages from the railway's point of view.
The problem for the mainline railway is that TFL have refused to accept barcode based tickets for underground/DLR travel, so any ticket that includes travel on the undergound/DLR can't be issued in this form. That creates an infrastructure problem. In a ticket office they can have multiple ticket printers but in smaller issuing locations such as self-service ticket machines and guards on trains multiple printers are less practical.
Some TOCs far from London have given their guards machines that only issue paper roll tickets. I have no idea if there is an official policy on what guards should do when a customer asks for a ticket they can't issue (when my family ran into the situation the gaurd on the northern train sold us tickets to London and told us to excess them on the train to london, which the train manager on the train to London somewhat-reluctantly did)
That isn't really an option for self-service ticket machines (with ToD) and guards on trains to/from London though, so they are still stuck issuing everything on traditional magstripe tickets.