That is, like a vector display, but using the LEDs of a flat screen. There's no electron ray scanning over the phosphors as there was in a cathode ray tube.
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The LEDs can switch only so fast - but does this latency prevent them from being switched independently?
The LEDs need to stay on for long enough for the human visual system to perceive them (and without flickering etc) - but this could be managed in other ways.
I think the main reason, apart from inertia, is that the larger market for displays is as TVs, where the concept of updating the whole frame (frames per second) is even more entrenched - though, there's no reason why video couldn't be displayed in the same way, it's just pushing out a kind of compression to the display itself. Light from real objects is not emitted one frame at a time.