As detailed as they are, the original 110 systems SC was going to have just didn't instil any excitement in me - especially compared to what ED was offering. But now that Roberts is embracing procedural generation there are no limits to SCs scope. :smilie:
To be fair, the announced procedural generation is not about making more star systems, but fill in environments in those already created by hand. However, I think the next step may very well be what you say - to create more systems. But that is to be seen.
My guess would be that the procedural generation will be used to make the environment around planet combat/exploring, which was announced earlier. If SC is going to allow combat in the woods the trees, water, creeks, mountains, etc. must be procedural generated. It's no way around that.
All this will happen after the first release of SC. So we're talking mid/late 2015 probably.
About DLC vs expansion pack which Pyros mention - they've said that content will be added to the persistent MMO universe constantly, with smaller packs and larger ones, but all for free. No purchasable DLC packs.
As for the single player version, Squadron 42, there'll be purchasable expansion packs. These will be big though. Chris Roberts don't like the DLC money grabbing routine many other studios are doing, so he believes people should get value for their money when buying expansion packs. The first one for SQ42 will be free for backers though: Behind Enemy Lines.