Feasible to apply image "interlacing" concept to video streaming for smoother buffering? The current state of video buffering technology is to encode a video multiple times at different resolutions, then when your network speed changes you change which video you are buffering from.

Would it be possible to give this same user experience but implement something like the interlacing method used in PNGs or in progressive JPGs (Adam7 algorithm or similar) to make this work more efficiently?

The basic concept would be that the video is encoded once, at its highest possible quality. Then as your network speed changes you can only download a certain percent of a frame each second. Since the data would be interlaced you would see a lower quality frame from not having enough bandwidth to download it all in a timely fashion.

This would be particularly interesting to see used in video calls so that the video can't stutter, just get worse in quality.
Such a concept exists, for example in MPEG-4 Scalable Video Coding. It's complicated, it comes at a cost in coding efficiency (quality/bitrate), and I don't know of anything that supports it. However it's an area of active research and it might be the way of the future. Given the current state of the art, it's a lot more practical just to do multiple transcodes, segment, and switch between them.