When I first read about this, my mind got back to Star Trek with their holding cells on board. No bars but a force field. Another technology that is as useless as digital license plate - gaining nothing while costing more. In fact, it is worst than gaining nothing -- you actually lost functionality. Now you need constant power to hold the prisoner in the cell. Each time when they have power problem say by enemy attacks, the prisoner can get out of the cell. Where as, with just plain prison cell bars, it stays lock until the bars rust out.
The digital plate is a technology-over-use as are the Star Trek holding cells. For registration purpose, fleet-cars can use the same set up as vehicle dealer-plates. Dealers don't need to buy a license for every show car. The can log the dealer plate and put it on any car they want to take out for a test or extended drive. If the logging must be centralized, easy enough to develop a Department of Motor Vehicle website such that the plate and VIN is logged each time when the plates are switched.
With these digital plates, I can see that after a vehicle accident, flood, what not, to have a hunch of "unknown" cars driving around. A prank lover with some knowledge can easily drive around a parking lot with some device and in 15 minutes causes hundreds of cars to have blank plates. Even one without much knowledge can easily do the same after simple experimentation - then aim at the particular area of plate with a BB gun while driving around. May take a little longer but disabling/destroying hundreds of licence plate in a parking lot in less than an hour.
Lots of disadvantages but hard to find a real advantage that cannot be had for much much lower cost.