Since computers become powerful to decode compressed audio and video in real-time, and storage capacities and bandwidths have increased to make storage and transmission of such streams practical, the demoscene has become even more niche than it used to be.
Nowadays, most demos are more about art than cutting edge technology. The exceptions tend to be demos that are constrained in one way or another, for example by being written for old hardware, or limited in size.
I'd like to propose a new kind of constrained demo - one that isn't limited to a particular size, but which is completely procedurally generated. Such techniques have always been used in demos (particularly constrained ones) but generally combined with other techniques. It would be interesting to see what is possible in demos that have no data that is temporally or spatially indexed or was generated by transforming temporally or spatially indexed data. That means no waveforms (all sounds must be synthesized), bitmaps, JPEGs, MP3s or video streams. Vector graphics are allowed, but only if they are hand-drawn (so you can't generate a vector image by automatically stenciling a bitmap image of the Mona Lisa, for example). If you want the Mona Lisa in your demo you have to draw the vectors yourself. Bitmap art could be done in the same way - rather than by storing the finished bitmap in the demo binary, one would have to store the sequence of commands the artist used to draw the image in whatever graphics program (which could then be rendered to a bitmap at startup time).
There is an amazing 4K intro scene that is exactly what you describe. Some truly amazing things are done, and it's all procedural. Most 64K demos are like this too.