It would be an interesting exercise to see if you could do anything interesting with modern GUI techniques applied to such a program.

In a sense they do already exist; there are any number of notepad-type applications that do something like this, but they're usually optimized for jotting quick notes rather than heavy-duty document writing. I'd actually want it to be a fairly full-featured word processor in some senses, with rich footnote/endnote support, maybe inline figures, table-of-contents generation, etc. Just don't force me to type into a representation of the formatted page so I have to see the margins and page breaks and pull tricks just to avoid looking at a proportional font while I type (I want to be able to see how many spaces I put in). The print preview could be a separate thing.