I’ve never seen a 4k or 8k analogue signal. Outside of VGA, I’m not aware that there are any standard analogue signal resolutions that went much higher resolution than 1080. VGA could get to just over 2k.
A big strength of the LZX approach is that it is an analogue process, so when you patch things together, they pretty much happen instantly. Adding extra modules into the chain doesn’t add frames of latency (except for the Memory Palace but that’s kind of its job).
Digital video (HDMI etc) doesn’t transmit a constant stream of pixels in the way that analogue video does (okay, continuous voltage). It groups chunks of information and compresses it in places. This means that a digital modular system would have to wait until it has received a whole frame of information before processing it. This would add latency. Every module would need enough memory to store the full 8k frame. This would increase complexity and cost.
Computer software is most efficient for this type of workflow.