I don't know the details of DNG but even the slightest complication could be a no-go for some manufacturers.
A simple example is white balance. The sensor doesn't know anything about it, but typical postprocessing makes both a 2700K incandescent and a 5700K strobe look white. A photographer might prefer to make the incandescent lights look more yellow. There's a white balance setting in the camera to do that when taking the picture, but it's a lot easier to get it perfect later in front of a large color-calibrated display than in the field.
Another example is dealing with a scene containing a lot of dynamic range, such as direct sunlight and dark shadows. The camera's sensor can capture a greater range of brightness than a computer screen can display or a printer can represent, so a photographer might prefer to delay decisions about what's dark grey with some details and what's clipped to black.
That’s not why we use RAW. It’s partly because (1) if you used Adobe RGB or Rec. 709 on a JPEG, a lot of people would screw it up, (2) you get a little extra raw data from the pre-filtering of Bayer, X-Trans, etc. data, (3) it’s less development work for camera manufacturers, and (4) partly historical.
No - the non-RAW image formats offered were traditionally JPG and 8-bit TIFF. Neither of those are suitable for good quality post-capture edits, irrespective of their colour space (in fact, too-wide a colour space is likely to make the initial capture worse because of the limited 8-bit-per-colour range).
These days there is HEIF/similar formats, which may be good enough. But support in 3rd party tools (including Adobe) is no better than RAW yet, i.e., you need to go through a conversion step. So...
Another advantage of RAW is non-destructive editing, at least in developers that support it and are more than import plugins for traditional editors. I rarely have to touch Photoshop these days.
Try adjusting a 8-bit RAW file and you will have the same problem.
You are conflating format and bitrate.
The actual main thing about RAW is that the transforms for white balance, gamma, brightness, colour space, etc. haven't yet been applied and baked into the file. With JPEG, at least some of those transforms have already been applied, which then limits how mucn you can do as opposed to starting with the untransformed sensor data.
You could definitely do much more with a 12-bit JPEG than you could with an 8-bit JPEG, but still not as much as you can do starting from RAW data.
As I understand it, the reason some professional sports photographers don't shoot RAW (or it's less important) is more because they are in an environment where publishing quickly is important, so upload speeds matter and there isn't really much time to postprocess.
I don't know Canon well, but 120fps w/ dual CFExpress + 800-1200 frames buffer is fairly standard on top-end professional sports/wildlife mirrorless cameras these days.
Personally I only shoot at 6fps in continuous for birds because anything faster is usually unnecessary (except for hummingbirds) and just creates more exposures to review/delete in post. I generally preference doing quiet single exposure (Qs) when doing wildlife to avoid any sounds, although since switching to the Z8 it's not really an issue since mirrorless is effectively silent in all modes at fairly open apertures.
I really wish they had raw precapture on the Z8, but i doubt they will do it
but the video mode supports full 8k60 atleast, so only a very tiny crop.
It can only do 8k60 though, not 8k120, so obviously the video pipeline and the C120 pipeline aren't identical.
When you say it doesn't go into DX mode for 11MP, you're correct for C120, but for C60 it /does/ go into DX mode (which captures a 19MP image). How this differs between C60 and C120, I'm not entirely sure in the camera internals. I had thought the resolution reduction is from cropping, but confirmed in the manual that when you enable C120, it's an 11MP photo but is full frame (no cropping).
Obviously this stuff is complex (maybe overly complex) and I haven't delved into it super deeply since I don't need it for my type of photography (and I never do video).
but this suggests that the limitations are not in sensor readout, but processing/saving. Its speculated that its due to heat problems if doing faster than 20fps full raw
These days, the bottleneck for achieving continuous shooting rate is probably writting to the sd card (which is the standard for the consumer/pro-sumer models).