Rattling around in my head lately has been the question whether the crux of the debate between Dispensationalism and Covenant Theology (and other perspectives) isn't a hermeneutical approach, or whether the church replaces Israel, and certainly not whether the Davidic kingdom has been inaugurated.
Instead, could the key question be, whether the OT promises necessarily speak of Israel as a political entity (distinct from the other nations of the earth), or whether they speak of ethnic israelites as recipients of the promise?
Some oversimplification in a brief post is inevitable, but here's what I'm getting at: If the promises demand the re-establishment of Israel as a distinct political entity, then it's not as obvious how the Church can be incorporated. I'm not suggesting it's at all impossible, but it would certainly give Dispensational arguments more weight.
But on the other hand, if the OT promises directed to "Israel" refer to ethnic Israelites receiving the promises, then it's much less difficult to understand how both ethnic Israelites and Gentiles can share in the promises, particularly when Christ, an ethnic Israelite, is the one in whom and through whom all the promises are bestowed on the seed/offspring (see Romans 4 and Galatians 3).
It's a sort fulfillment to a sort of offspring that might not have been entirely clear in the OT. In fact, it certainly wasn't entirely clear. But it could be the sort of thing that the NT describes as a mystery, unveiled in the last days. Possibly even like what we read about in Ephesians 3.