If you're going to put a dot matrix display of images on your house, just cover it with LCD screens. At some point too much tech just makes it boring and plain.
The backlight bleed of LCDs would look pretty awful at night. Also I’m not sure how others feel about it but to me a DIY LED matrix is way cooler than dropping in a prebuilt screen with HDMI input.
Let’s not gatekeep our fun holiday light displays. Would be interesting to see both approaches side by side.
Some people do combine those with their individual pixels. They will also use projection mapping. All three techniques look different and add to the show in different ways.