The main limitation with Git is that it only works with
plain text (think Windows Notepad). I have seen authors
resort to plain text or markdown in order to take
advantage of Git, but this means losing all of your rich
formatting such as images and fonts. This is usually too
much of a sacrifice for companies as formatting needs to
be reapplied with each publication, which is very
time-consuming and prone to errors.
For plain text, sure, for markdown, nope.
"...and fonts"
Sure, but formatting can be applied after. With markdown, it supports HTML so you could event apply custom formatting inline, if you really wanted to do something so dirty.
"This is usually too much of a sacrifice for companies as formatting needs to be reapplied with each publication, which is very time-consuming and prone to errors."
Why not solve this problem? Why not make markdown more accessible to those wanting to use Word? Make something that looks like word, but in reality takes markdown and renders it using some flexible settings file?
I personally quite like markdown, to me it represents a minimal, future proof language. I would actually change a few things about markdown to make it more useful in an academic setting. Issues for me are referencing structure, diagrams, embedding content (at the position) and plots. Those things fixed, I would never look back at LaTeX or Word again.
One thing I would like to see remain, is the plain-text readability and being able to process it line-by-line without having to remember anything about the previous line.
Good luck with this venture, but if you're wanting to take a pivot, let me know :)