Things like Clavinova keyboards Piano or Line 6 Pods simulating Guitar/Bass amps & effects have been out their for decades now.
And while they have been quite popular due to the sheer number of sonorities and the convenience they bring (possibility to play with an headset, extremely useful to play at night or in apartments), traditional analog setups remain strong.
Playing on an analog setup still is more pleasant and more expressive IMHO, in particular "simulators" tend to mask the attack when hitting a note, and hides a lot the tension/crispation in the hands/fingers when playing, leading to potential bad habits, specially for people learning to play an instrument. Analog to digital and digital to analog conversion definitely lead to loses in expressiveness.