I get motion sickness when sitting sideways or backwards on a car. People tend to become nauseous when they sense motion but don't see it, or what they see doesn't align with their other senses. Even the small amount of lag that a "digital window" would likely have, will make things much worse.

Maybe. I think people could survive it, sure. But I also wonder if there's a part of our lizard brain that just for safety's sake prefers to be able to see out of any small enclosed space we might find ourselves in. And that lizard brain is smart enough to know that a flat screen is fake. Again, I just think of flying in a plane today but with no windows and I, at least, am immediately squigged out.

I also feel like a lot of modern air travel is designed around making something that's highly unnatural and inherently terrifying into something palatable for most people. I'm not talking about actual safety, but the perception of safety. Which isn't exactly a logic thing. More about keeping that lizard brain from freaking out too hard.