Wasn't there a plan to make him an Admiral during the Dominion War storyline? I recall reading that they were going to promote him, but that Berman or someone else nixed it, as they didn't want him outranking Picard.
It had nothing to do with him outranking Picard. That's fan-thinking.
From Memory Alpha, this is from Star Trek Montly, so an official source:
One of the plans for the six-episode arc at the start of season six was to promote Sisko to admiral, even if only temporarily. This was vetoed after extensive discussion by Ira Steven Behr, who "felt it took the lead character out of the Star Trek pantheon". (Star Trek Monthly issue 38)
I don't know what to make of Behr's comments, as Kirk spent a significant portion of his career as an admiral- though he always managed to find a way back to the Enterprise. Sisko would still have been able to command Deep Space 9, though it's likely he would have been tasked with commanding an entire battle-group or fleet as the war progressed.
I suppose such a development would have necessitated his character being placed in situations that differed from those typically seen for a series lead character, but Deep Space 9 thrived on its ability to utilize story angles and plot developments that were significantly different from those of the other Star Trek series.
I do have to wonder if we would have seen Admiral Ross' character featured as extensively as he was, given that Sisko would likely have assumed his role for the duration of his time in the admiralty.