You are absolutely right. I believe this deep learning technique is a fancy way for mixing many many images automatically given a user's guidance.

Do you think a similar technique could work for generating 3D models?

For example, it's not hard to imagine future organic sculpting packages (e.g. ZBrush) having this type of tech integrated. Perhaps in-game character sculpting systems as well.

It's possible. But 3D data (3D models, videos) are much more difficult to model via a deep neural net. While most of the researchers focus on modeling 2d images in recent years, there are a few work on 3D. For example, here is a project on modeling 3D objects like chairs and tables. https://arxiv.org/abs/1411.5928

Thanks for the reply. As coincidence would have it, this appeared on HN just a couple hours after, referencing the same paper:

https://news.ycombinator.com/item?id=12581420

Appears to be fundamentally 2D, but the interpolation between orientations gives it a sort of meta 3D aspect.

I can definitely see something like this being used for story boarding and doing rough sketches quickly.