It might fall down with poly aftertouch, but not otherwise, so long as cheap sources didn't queue up every sampled value from a mod source and send the lot! The trick is to use good sources that sample, and send at rapid fixed intervals (most do because they multiplex internally if they have several sources). Then all that need be done is to have a good receiver that uses high core res and an interpolator that mimics a flywheel, but overcomes its own 'mass' on hearing fast jumps in value by stepping up its own core step size. This method might even cope with poly aftertouch, if there was only one such source on the cable. When I designed my software I tested several keyboards and knob-twiddlers, and most could produce a viable result, sometimes needing thinning of incoming messages, the only ones that got sluggish are those that held and sent everything regardless of wheel speed, and thinning works for those too, if they get through the cable in time. Also, too low a source res isn't nice, even a Yamaha SY35 uses only 1 in 4 values on the scale for mod wheel, but uses all for the joystick. The problem isn't MIDI, it's only when not using it fully for what it is that it falls down, and newer devices tend to abuse it more than old ones. I can get an analog-smooth 10 octave sweep out of standard one-byte pitch bend with no glitches or zipper noise, going fast or slow, though of course the final settled note won't have better than about a semitone precision! Then again, when people are sweeping ten octaves, it's not usually that kind of precision they're after with it, but the dramatic effect..
I'll leave it there, probably way too offtopic now for this thread. I just think that like a good bass, MIDI isn't going to fall apart and vanish. People might add to it, but they won't get rid. Too many fine instruments would be ruled out if they did that.