I would not consider capacitance to be an effective isolation mechanism. It's inability to handle instantaneous voltage changes without consequences rules that out in my book.
I wouldn't be so black-and-white about it -- any isolation solution will have
some capacitance between primary and secondary, and indeed even magnetic isolators have Y-class safety caps bridging the isolation between primary and secondary. Why not actually transfer power over these caps?
Put another way, if the "consequence" of an instantaneous voltage change is that the resulting current gets immediately sunk into the mains earth connection; well then that hardly seems like a serious concern. Like I said, most magnetic isolators have these Y-class caps already.
With a capacitance chosen to not trip the RCD in your house, and arbitrarily high frequencies, you can
theoretically transfer an unlimited amount of power. Of course in practice, you'd only be able to get away with very small power levels, but there are plenty of circuits these days that'll happily run on milliwatts, so it
might even be an worthwhile solution in those cases.