I'm pretty sure that it's rendered in a canvas, not with the DOM, but I may be mistaken. Either way it's simply because of laziness or complexity-avoidance that the minimap uses blocks, not a restriction of the medium.
The minimap could be on par with sublimes, but for whatever reason the dev who made the plugin hasn't made it so. That doesn't mean that it's impossible or impractical due to some restriction of atom itself.
You're right that it does use a canvas, but I'm not sure that it could do full rendering at decent speeds. The trick is scrolling at 60fps. I'm not sure JS Canvas can draw 100,000 characters in 16ms. I think you could do it with WebGL but it's gonna be a while/forever before anyone does that, and then the JS preparation of the data might bog your CPU.
The minimap could be on par with sublimes, but for whatever reason the dev who made the plugin hasn't made it so. That doesn't mean that it's impossible or impractical due to some restriction of atom itself.