I'm sure you're right that some people will find them unusably terrifying, but my experience is that most people with a typical level of fear-of-heights can handle gondolae just fine. A friend of mine, for instance, refuses to ride on a chair lift, but has no problem with a gondola.
I've spent a lot of time on ski lifts over the years and I've had one occasion where people had obvious problems with the height - we were on the Vanoise Express between La Plagne and Les Arcs in the French Alps, which is a very long, very large gondola. When we set off from the La Plagne side it was misty so you couldn't really see how high up we were. However, half way across the car emerged from the mist and the fact that the car was 380m up became very clear - one person fainted and another had a very loud panic attack.
From the Wiki page: "This closure effectively shut down Paradiski for that season."
I skied in Vallandry that season staying right near Peisey-Vallandry where the cable car station was.
If anything it made my skiing experience all the better as the resort was so much quieter than normal. We still had a large ski area to use (Vallandry and Les Arcs aren't small). Didn't care that we couldn't get over to La Plagne, Vallandry/Les Arcs was still as popular resort before the Vanoise Express existed.
OP mentioned height. Gondola service in high winds are typically shut down, eg in the Alpine, etc. So thats not the normal fear associated with such [1]; which is more ~vertigo. But 20 ft is like a second floor aprtment or office--in other words, its an inherently normal-sort-of-height for most urban dwellers. But you raise a good point: chronic wind exposure in many places (eg, urban canyons, sf/bay, midwest, chicago etc) can be a significant hazard to this type of service in situ.
