Can SELinux substitute DAC?

A nice twitter discussion with Erling Hellenäs caught my full attention later when I was heading home: Can SELinux substitute DAC? I know it can't and doesn't in the current implementation, but why not and what would be needed?

SELinux is implemented through the Linux Security Modules framework which allows for different security systems to be implemented and integrated in the Linux kernel. Through LSM, various security-sensitive operations can be secured further through additional access checks. This criteria was made to have LSM be as minimally invasive as possible.

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