Sounds incredibly clunky. There are so many targeting options already for game pads the thing you want is rarely more than a couple of presses away. You have filters you can predefined.
L1+x I have to engaged enemies l1+square =box objects. (For when you have to activate that shield generator surrounded by mobs Or target the tomes npc)

One that seems lesser known is if you hold l1 and press up and down it scrolls targets in the enemy list.

I wouldn't want a cross hair tagged to my right stick for example as the camera is usually looking around the arena for mechanics.

You can already use mouseovers with the touch pad. But that's clunky as hell