Or even take a modern computer, use an fb driver and just make the best demo you can. No 3D graphics, just a framebuffer
I guess as capacity of the machine increase, so does the exponent on the required effort to move limits beyond the obvious. In some way this demo demonstrates that.. The Commodore64 was/is ahead of the 5150 in the demoscene stuff in multiple ways, for instance, it has a more capable soundchip, (I have a hard time imagening better sound coming out of a pc speaker, but again, this is an "obvious" limit, and there's no saying that someone can't hack the pc speaker to do cooler stuff than what's currently being done on the SID chip), other "obvious" advantages of C64 is that the VIC has sprites and scroll registers, but this demo blows some of that out of the water..
In other words, there will be the "obvious" solutions that anyone can see (and their related limits).. More advanced thinking leads to less obvious solutions (moving the known limit), and even more advanced thinking leads to even less obvious solutions (and so again, moves the known limit).
There is definitely a place for the types of demos that you are talking about. Some of them are being made, though the introduction of artificial constraints is common (e.g. the size is limited to 64 kB or 4 kB). There is even value in creating the best demo you can, even if it doesn't impress the demoscene, simply because showing what you can do will likely exhibit skills beyond those of a run-of-the-mill developer.