I would "refine" the idea a little. This is just a short idea: first of all I would set a maximum explosion size (at lvl 12 or maximum 15). Set also a maximum lengh between the distance. Now add a new upgrade for (as example) shrapnels (smaller explosiv parts/fragments hurled away from the main explosion). If you are into SciFi for the game, you can also add "laser explosions", where a laser shoots along the fuse line and destroys everything on the way. That upgrade can basically upgraded from a single line to a "destructive wave", so the fuse is not just a lengh limit, it is also an active gameplay element.
I can see the potential in the game idea and it's fun.