Even if it were implemented, volcanoes erupt only once in a very long time; it would virtually make no difference in-game and therefore probably isn't adding any crucial game play elements. Although however unlikely it is for a volcano to erupt within world generation, I believe it should still be implemented and that it may be already planned. A better statement wouldn't be that it should be implemented, but how.
I can imagine something among the lines of: "Deity X revealed his rage by raining fire and ash down upon the town of Y".
But as Witty stated, there are more crucial game play elements at hand.
I think volcano eruptions should fall into a general category of Disasters that gods can mete out on mortals. Floods, plagues, eruptions, raining elephants, whatever. This would alter the region permanently, basically regenerating it with a much stronger affinity for the Disaster's Sphere. (Remember, Good Regions and Evil Regions are a placeholder for a richer Sphere-based system to come.)
The Disaster itself needs some kind of tangible effect because it's always possible for a player to "time travel" by regenning the world and stopping at that point to send an adventurer or embark party, but it doesn't need to be a super-duper high-realism simulation. A volcanic eruption can be modeled as increasing the top of the magma pipe to 3 over the rim. The
actual rim, even if it's player-built. And even if it requires adding three layers of sky to get three layers over the player-built rim
Similarly, a flood can just increase the top of a body of water, and other effects can re-use the evil weather mechanics.