Drop Ship is something related to Shipping Address. (It is not the only case when PO to be raised directly from SO).
PO directly from SO can be raised even in the case of Default Supplier (Which is generally the case for majority of established SME) or Rate Contract Item.
Moreover, most of the SMEs do not use “Material Request” Process at least for the items where default suppliers are established OR there is a Rate Contract Item.
With above premises, we suggest one simple change. “Purchase Order” button in SO should be displayed in either case (whether it’s drop ship item or not). Rest of the system can be the same. (If it’s Drop Ship Item, PO can display Customer’s shipping address).
Above flow is adopted by “Quickbooks” for many years. At least, I have seen it for more than 15 years. Odoo with it’s “Just In Time Engine” goes one step further. Odoo directly prepares “Draft POs” for as many items and as many default supplier. (Which is very-very useful for SO having many items). If that can be adopted, it can be wonderful and can add Wow factor to ERPNext. (In fact, there are many good ERPs adopt above flow, but Quoting for above two (QB & Odoo) is sufficient here.