I think a retro fireplace would look really cool.
I went down the path of implementing this – and learned a few things – but ultimately I think it isn’t feasible.
The widgets don’t allow for drawing single pixels, I suppose I could create 2,080 1x1 boxes but I suspect that would not be performant on the server-side.
Tried a different approach of taking a Curses-based ASCII art fire animation and serving the result over HTTP for an app to fetch. This looks pretty good but the Tidbyt rejected animated images with more than 64 frames. With so few, you can tell where the animation restarts its loop and it doesn’t look so hot.
It was fun going down this path though. you had a good idea! 
One more view of the animation with frame numbers at 10x size:
At a pause of 100s between frames we would have needed 128 frames to cover 20 seconds of screen time but I can (apparently) only push 64 frames to the tidbyt at once.