Can I use cement instead of paint for interior walls?
Cement is acceptable as an interior finish.  The reason why it isn't used more is that it is heavy and terribly hard to make look nice.  Basically once it is dry it is done for good.  Also cement adheres to dry cement but not that well so patching is not easy.

As for durability it depends how you prepare the surface and the thickness of the install.  In my area it was a thing to finish basements with a cement coating (over the poured cement walls).  These went on about 1/4-1/2" thick and looks a bit like plaster after a few coats of primer and paint.  You can certainly give the concrete a pigment but it has a pretty prickly surface that a thick coating of paint would help smooth.  

The other thing to think about is hanging things on the wall or doing things like electrical.  You have to know that if you hang something on the wall you will need to use adhesive.  If it is something heavy you might have a hard time taking the adhesive off without ripping out the underlying cement.  In the older basements we would go in we would see dozens of little cement patches missing from things like pictures or whatever.