It depends what side of it you're trying to do, just getting a tree structure of Sprite-like things working is actually quite easy - canvas' drawing transform stack is ideal for resolving the nested transforms for each shape. The trickier part is re-rendering the smallest region of canvas possible when you do change part of the display list.
Maybe I should post a link to my stuff when I get around to working on it some more!
It was the event handling side of things that I realized were going to be a fair bit of effort - all standard graphics stuff, but not things that I was particularly interested in writing at this moment in time.
Having said that, if you do have something along these lines I would love to hear about it.
I gave up when I realized how big a task this would be and that the result would probably be slow and almost surely superseded in some future release of Canvas.