with today's tech and hdd size's yes please do.
also do you know the difference between a movie with real actors in it and a charector in a disney cartoon.
comparing heavy rain to mad dog is kind of the same there not even the same video mad dog has real people with real house's & horse's heavy rain has cartoons.
with todays tech the game would not be the same thing everytime you play with the hdd size & blue ray hd we have now they could make it where the same game never plays twice that technoligy has been around for awhile now and there still doing it in games like left 4 dead.
add that with new HD video all randomized and you have something that is current and totally different then anything out there becuase it is real people cars etc.
when you want a game to look real what do you compare it with?
Real != better..
The game you describe would be completely unplayable, the only way you can play the existing LD games is by learning them. (ie know that you are playing the same game twice)
They'd still suffer from the same problem of requiring the right action at exactly the right moment because a real person and flim can't create footage that seemlessly merges into another path for every possible moment of the film (CG rendered stuff can, but that's not what you were saying, and if you're doing CG rendered you may as well make a real game, not use video footage)
Things like the CDI and SegaCD were a complete disaster, because Sega / Phillips foolishy decided that CGI was the future. Even in the cases where they did add branching paths the games were *terrible* Both of them decided graphics were more important than gameplay, and for some reason that footage of real things was more imporant than well drawn sprites etc. It was a bad idea, that created bad games, and even new technology won't change that, they'll just look a bit nicer.
The only thing pre-recorded video gives you is a severely limited game experience, and if you mix it with overlay graphics to create something closer to a real game (mach 3 etc.) there is still no way you're going to have proper interaction between video and gameplay which is in any way comparable to modern games.
Basically you'd be trading everything good that exists in games in exchange for some more realistic looking graphics, and in every case where that's been done before, even when not applied to LD / Video technology the gameplay quality has been degraded. Take Deus Ex 2, it looked great compared to Deus Ex, but they traded large expansive interactive environments for smaller, more static, but higher detail ones. The universal opinion? That it sucked. FMV based games are just a further step in that direction, sure you can have real visuals, but you trade ALL the gameplay for it.
If you want real, go outside...