Seems plausible to me. There might be some difficulties in fast ram storage and access for the point cloud to reside, or applying shader type effects I could see. Maybe just small hurdles really but I don't see why we shouldn't be optimistic with this approach. It probably depends on their method or hardware requirements for fetching the proper pixels to display but even their realtime demo is very impressive at this stage.
Look for the interview they did where they let the interviewer zoom around in the island. Right down to individual pebbles on the paths and fully 3D leaves, so it seems to work.
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