This is a great and very tricky question.

I had to look into why rebasing tokens don't work in Uniswap. As far as I can tell, changing the quantity of a token in a pool while keeping the other one invariant violates the core notion of the constant product. Interestingly, stETH fails in different ways for uniswap v2/3. The proceeds in 2 are donated to the pool, in 3 stETH doesn't work at all.

I think the answer hinges on whether uniswap and other such defi products can be made to accommodate rebasing tokens. I think this is unlikely, even if stablecoins move to fully interest bearing. Already, defi collateral moved from ETH to stETH, but this wasn't sufficient incentive for major defi protocols to natively incorporate the unwrapped version. Even though I do expect most stables to move towards interest bearing (and I expect these will be rebasing, naturally), I don't think they will be able to change the core logic of defi on their own. So I think we will be stuck with the wrapping approach for now on existing major defi products.

That said, I don't think there's any fundamental reason new composable defi can't work with rebase tokens, it's just that those assumptions have to be built into the protocol from inception. The problem was that many of these defi protocols emerged prior to the creation of rebase tokens, so they didn't contemplate that eventuality. Because both stETH and yield bearing stables will be such important collateral types going forward, I would imagine that future defi protocols would specifically try and determine how to support rebase tokens.