ACL with nested groups
This may not fit your scenario, but for others we have been able to provide this by using Relationships to 'join the dots'


If someone (X) has Permissioned Relationship to Org 1
and Org 1 has permission to Org 1.1, 
and person Y has permission to Org 1.1
and if Org 1.1 has permissioned relationship to Z, then 
X will see Y and Z
Y will see Z


Oh, and you don't need to add any ACLs at all, this is taken care of via this Fuzion Extension

May not be quite what you need but may be useful to others who read your ticket and who could switch to having Relationships at the heart of the ACL requirements.