Lets say we have image of CD (from scanner). Can we technically read it? What DPI is needed?
(700 MB) / ((10 cm) * 10 cm) = 378 839 604 bits / (inch * inch)
(from google calculator).
You'd have to get a scan with at least 378 839 604 dots per square inch, or (roughly) 20000 DPI. Good home scanners have 1200 or 2400 DPI at most.
Additionally you'd have to use the right wavelength of light to emit and record... those pits are so tiny that you can only fit light of a certain frequency there- so a conventional scanner wouldn't work!
Bottom line being that you can consider "DVD drive" == "scanner" (it has the right frequency laser and reader) and "ripping software" == "software to create scan image"
So the technology exists already. I guess if you were really keen you could reconstruct that DVD reader data into an graphical format of some kind such as png or bmp. However it is much easier to use conventional "image" formats to encode and transmit the data.
Answer is "yes, sort of, but not the way you described it"
My guess is that old-style CDs (not newer DVD/BlueRay formats) might be able to be. I'd also have to guess (again) that it would require at least double the resolution in each (2D) direction as the amount of data stored.
If those guesses have anything at all to do with reality, it would be a VERY data intensive operation. Would be much easier to just pack up the bits with a CD reader, rather than store/transmit a scan. :-)
In theory a lot of things are possible. In practice - no.
Theoretically you could build a scanner (maybe) which would be able to do such an operation, only building it would cost so much more than just taking a CD player, that noone in their right mind would do a thing like that. Which leaves us with a conclusion again, that practically, it's not possible.