I don't know if the 20 limit is large enough in practice. People do weird things (after migrating from non-DNS naming services, for example). Then there is label compression, so you can have theoretically have several thousand RRs in a single 64 KiB response. These numbers are large enough that a simple multi-pass approach is probably not a good idea.

And practically speaking, none of this CNAME-chain chasing adds any functionality because recursive servers are expected to produce ready-to-use answers.