Except phonetic writing systems are aren't even capable of representing Chinese names correctly. I think you're underestimating the extent to which homophones are prevalent in Chinese. It's not just classical texts, it's all written texts and most non-trivial spoken words, including names. The vast majority of Chinese morphemes are only a syllable long, and have up to hundreds of homophones. Unlike most European languages, Chinese names do not all come from a fixed list like "John. Mary, Jane, etc..." and are instead constructed directly from morphemes. The result is that whenever you encounter a Chinese name transliterated phonetically in any system, there is no deterministic way of converting it back into Chinese without ambiguity.
I guess my question is how much of a problem are these in spoken communication (say over a telephone where there's less shared situational context)? My intuition is that if the prevalence of homophones were so troublesome to make a phonetic writing system difficult/impractical to use, they'd also make spoken telephone conversations similarly difficult/impractical. Since Chinese people can obviously speak productively on the telephone, then there must be enough context in the phoneme-stream that it's sufficient to effectively communicate without the extra context provided by the characters.
That's not to say the characters don't provide an extra layer of depth and subtlety to written text over phonetic writing.
I think that's the best way to put it. Like you intuited, a phonetic system is perfectly capable of writing down spoken conversations, but without as much context as a spoken conversation it's going to get more confusing. For example, he she and it in Chinese are all pronounced "tā", but are written as 他，她， and 它 respectively in Chinese. In fact it's common to write "ta" as an equivalent to xhe/xer/xem.
Sorry I edited on you, but what I meant was a phonetic system could be used in all ways contemporary spoken Mandarin is currently used without getting too tripped up by homophones.
There would obviously be difficulties when dealing with very old texts, but I think such difficulties are inevitable regardless of the language as the changes pile up. Something will be lost unless you spend the appropriate effort learning the state of language as it existed when the text originally written.
> I realize now that you consider Classical Chinese as a seperate language from Modern Chinese. I and most Chinese speakers would probably disagree, but I don't think that's a line that can be drawn without a lot of nitpicking from both of us.
Yeah.