It is an interesting idea, but would require people to purchase additional hardware and continually fill it with chemicals to keep it operational... at least I'd think it would? I suppose they may figure out how to make it use cartridges or other sorts of easily disposed of things, like a printer, otherwise it may need cleaning et al too.
I guess a bigger concern, though, would be if a smell could induce illness in people. Probably why it's not commonly done in movies. Although you sort of get that type of thing at places like Universal Studios or whatnot where you may enter a 'location' and they'll make it smell gritty, or like a jungle, or a cave, or something, but I have to admit I'm not really that keen to smelling the sewers I'm crawling around in, or the rotting corpses all around me