Actually it's "concurrent versions systems". I actually floated this idea at work a while back and people thought it was a great idea but nobody ever got around to trying it, probably because finding a globally acessible but secure machine that you can run CVS on isn't trivial.
As far as locking, there are locking systems out there but when dev teams are small (as most are) or transient (as in open source), file locking is far more of a problem than file merging. It's no fun to have to wait till Monday because someone forgot to unlock something and left early on Friday.
I believe that the software you speak of was called 'Lifestreams', it stored every edit of every file forever, down the the keystroke. It would be a pretty amazing system, having temporal access to a file's history like that. Finally we've found a way to fill up the cheap terabytes of storage we'll all have next year with something other than mp3s and pr0n.
I've always wanted something like Lifestreams-- for other people's writing. I would read emails or USENET posts and get the sense that an edit had taken place, and I would've liked a "jog" button that would roll back to previous revisions of the document. That way I could learn how it is that the funniest people hone their jokes.