Yes, this is pretty much how we did such things already in the 1990s. The problem with this is that this only supports a predefined, rather limitted character set. But you could have expanded on this and may have loaded custom characters on demand (which would have been a rather small payload for a single character.) But there's yet another problem, namely color management, which isn't supported by GIF (which we need for the transparent background), and they probably really wanted to go with JPEG for this. (At that time, CRTs were still much around and those tended to show greys with a reddish tint when managed badly. Something Apple would have certainly wanted to avoid.)

BTW, here's a PoC (a website from 1998 written in about two hours [so not much of hassle even then] demoing pure JS rendering from a data file, all just classic table layout rendered in the browser, all styled text and the ticker are rendered from single-character images): https://www.masswerk.at/demospace/relayWeb_en/welcome.htm