You are missing the point. Lots of code has multiple authors. There is offer no space indention that works for all authors. With tabs each author or reader can use the width that works for them.

automatically display indent spaces as a tab character

You can't really do this reliably. The problem is that spaces may be used in other places for alignment where the width shouldn't be dynamic. If you do a simple s/ /\t/g you will have funny results where code was aligned carefully using spaces. (The reverse does work though if you want to go from tabs to spaces, because tabs contain more information.)

You could potentially do a good job with a full parser for the language in question to determine the indent level and separate indent from alignment. But I'd rather not rely on this for no reason. Sometimes I don't have a full parser available for every language I want to edit.