Nebulous
Legend
It's absolutely possible. The megadungeon just south of the city in my campaign has been a mainstay of 5e play so far.
For the record, I wrote it in a mix of 1e, 4e and 5e, and it works fine in both 1e and 5e (nobody ever got to it during the 4e days). So far, I haven't found that it needs any changes in how it was presented from 1e, at least running it as a part of a sandbox campaign.
I don't see how any of these are required for a megadungeon. So far, in my campaign:
- Level advancement has been by-the-book with xp. Early levels are fast and lethal, but mid-levels slow down. I don't see how this would be a problem.
- There's no need to incorporate xp for gold or to change anything if you're using milestone xp; you just have to decide when the "ding!" moment is. But I don't see any reason that this would improve classic style megadungeon play emulation; a big part of classic play was "choose your difficulty and reward level", which mostly fails if you use milestone xps.
- I'm not even sure what your question about inspiration (statement?) means, or why it's a question. Yes, inspiration is a new mechanic, and yes, there are plenty of opportunities for roleplay in a megadungeon.
- Short rests don't change the way the players play, it just speeds up their progress. So does the fact that pcs no longer naturally heal at a rate of 1 hp/day. It's fine.
- Death really isn't that hard, especially if a monster hits a downed pc.
- Hirelings and torchbearers are entirely about playstyle, not system.
- The lack of instant death is fine. You can still have deadly traps that are very meaningful, especially if you mix them with other encounters. 4e did a wonderful job of figuring out the best ways to use traps, as did the 3e book Dungeonscape.
Yeah, hitting a PC when he/she is down is the fastest way to kill any character any level. Two auto death failures from the crit, so their next roll on their turn could be fatal.