Such a system works well until it meets words like ayatollahlike, midtermitis , Reaganometrics and many more, which often produce loose lines. The situation has now changed, memory is cheap and available. Hyphenologist is a very powerful algorithm, and for American English is based on some 10,000 parts of words. An internal, amendable, exception list is included, but contains at worst 1000 words. For the romance languages, Italian, Spanish etc.
Algorithms are small, fast, and very accurate.
The dictionary method is a waste of resources. The Germans as a matter of routine invent perfectly correct German words by adding one word to another, so no dictionary can ever be created. If attempted, it rapidly becomes impossibly large, out of date, or does not cover the words required by the user. Algorithms are the only possible solution. Dutch, Norwegian, Swedish etc. have similar problems.