That is still very possible (I think it’s also possible that Notch doesn’t really have a well-thought out plan, that all this wasn’t planned and that he just did what he can do best, playing around with a game concept and having fun, all alone. I’m not arguing that’s a bad thing.) but the game has certain properties that could make it a success, even if it seems incredibly nerdy.
Only a handful people had to re-build the Enterprise in Minecraft and make a video of it. Only a handful people had to build ALUs and CPUs in Minecraft and make a video of them. Only a handful people had to design practical redstone and rail contraptions and make video tutorials. Only a handful people had to build tools, make texture packs and code mods. Only a handful people had to make adventure maps.
0x10c could be similar: Only a handful of people have to write software (and judging from the initial response, that handful will be quite the handful). And someone writes really cool software and shows it off in an YouTube video others who have no intention of ever really understanding the DCPU-16 nevertheless have a reason to check out the game and run that software.
There is obviously more to a game than that, but I do think that 0x10c has at least the potential to be quite popular even for those who don’t know how to write assembler.
In minecraft, you might be able to load the map for yourself or, if you're already very knowledgeable, copy parts of it into your own map. But building your own x-bit-CPU in minecraft is a herculean task where even the block-by-block copying takes a lot of skill, while in 0x10c, you basically only need to know Ctrl+C, Ctrl+V.
I guess the biggest change will be when Notch introduces interface to those DCPU-16's. Because that's when you have to start adapting code to your own situation in the galaxy. Still, however, that will provide for a reasonably soft learning curve.
What will drive adoption and innovation is the competition of "I can do X" and "I want to do X" in the marketplace of ideas. It's very solid in minecraft, but if Notch sets the right incentives in 0x10c, I could see this getting a surprisingly broad userbase as well.
EDIT: This is the one using discrete transistors (http://www.6502.org/users/dieter/mt15/mt15.htm)
(And see other sites on the homebrew CPU web ring.)
Also what is the exchange rate of internet points to HN/reddit karma these days?
Ah, disappointment. :)