This is pretty much how AFGs work although there is usually an ASIC with a LUT or something in it instead. Think the AD9850 works the same as well. They are much more expensive than cheap analog function generators as they have some difficult problems to solve with harmonic content, clock division, control, feedback etc. Plus once you've solved all of these you still have a driver amp on the end of it, a power supply on the front end. Literally 50% of the device is still analogue.
Personally I find that full analogue generators have a nice manual control which fits better with some use cases than encoders or manual frequency programming. Sometimes you need to frequency sweep by hand. I have the RF equivalent of an AFG (Marconi 2019A, repaired yesterday whoohoo!) i.e. it does sine only and it's pretty much useless for sweeping frequencies. If you want a spot frequency and power level/amplitude you're fine. If you want to sweep by hand forget it. If you want to sweep automatically, AFGs have some nice features but you can do that with two analogue generators with the VCF in of the second one connected to the ramp out of the first one.
I'd still like a nice HP 33120a, but it's not happening.