I am on the fence on this one. I like it obviously since if I blow your cap up before you get it outta the middle of your fleet. Though I don't know if its really a good idea or not. Still interesting thought.

On one hand this obviously makes some sense, since explosions generally do more than zero damage when they happen right next to a ship.

On the other hand, consider the way damage is handled in this game: even highly advanced energy weapons with a direct hit only do a very small amount of damage to ships' shields. With that in mind, the random bits of shrapnel and non-focused explosions of a ship blowing up nearby seem like they would do even less damage.

What's the point of even programming this damage in, if it only deals something like 5 damage points to all adjacent ships?

Now if the cap actually successfully RAMMED another ship, then maybe we could factor in some serious damage.

How about a "chance to damage" surrounding ships on an individual basis (not sure if it's possible)?

Assuming an explosion does not uniformly spread damage evenly:

Say 10 frigates and 5 cruisers surround an exploding Cap ship; give the frigates a 50% chance of some damage and the cruisers a 25% chance - to simulate their respective "toughness".