It's a mixed bag. Depends on the retailer. For instance, I recently switched from paper day Travelcards to GWR Smartcard, but then I bought a load of LNER vouchers for the Amex cashback.
I also have an LNER Smartcard, but LNER choose not to fulfill day tickets to Smartcard even when the fare setter has enabled them for Smartcard fulfillment. So I have to get a CCST each time if I want to use my prepaid vouchers. I find it quite amusing, under those circumstances, to then be lectured by TOCs via their publicity about what a scourge on the environment CCSTs are.
There's actually quite a bit of work needs doing before CCSTs could sensibly be withdrawn. For cross-London tickets and U Zone tickets, e-tickets will probably be the main alternative (but the solution never seems to come), but I'm not sure if that's feasible for day Travelcards? If not, you'd need them to be available on all TOC Smartcards as well as Oyster, I should have thought. Currently that is not the case.