The original Cubic Chunks mod is probably not something to point to as showing the possibilities. I've used it, and, yeah maybe the potential was there but it pointed out the flaws. The theoretical performance gains never materialized, the terrain generator had issues, the lighting engine freaked out regularly, and the mod itself never made the transition to the new Anvil save format.
It just shows that while Cubic Chunks might be a good idea on paper, actually implementing it would take a near ground up rewrite of Minecraft.
Feel free to try it yourself. Get MultMC or MCNostalgia to crank Minecraft back to the proper version. Try playing for even fifteen minutes. Then realize that was the result of months of coding.
It is a great idea. It just isn't practical to implement this late in Minecraft's development cycle.