That's actually the approach Mozilla's Bespin/Skywriter project took. It was shuttered when Cloud9/Ace (which render to DOM) supplanted most of its goals. I would be surprised if the performance delta of switching to canvas would actually be that large, given that using the DOM allows you to harness GPU acceleration for things like translation.
Doesn't canvas have its own GPU accelerated batched draw operations? All tast needs to be accelerated, really, is font rendering, and I would be very surprised if it wasn't.
