For every photo of a PPD in Soviet service, there are likely a hundred with PPShs. The PPSh is certainly one of the classics.
If inside dimensions were OK, only the fit of the rear receiver cap would be affected by use of thinner steel. Strength would likely not be an issue.
Look at the photos posted by J. Savoie - the area where the barrel block would go, and the hinge pin/barrel retainer fits. The barrel shroud flares down into that area. The barrel jacket portion is neither round nor square. Has flattened sides, with well radiused corners. I am sure that one could be fabricated, but it wouldn't be easy. Perhaps some tubing could be pressed to flatten the sides. The Yugo 49 looks like a PPSh with a tubular barrel jacket.
If a male plug were made, and a simple die, steel could be pressed into shape, then formed around the male plug to close the bottom of the jacket. It could be done, but the tooling would have to be prepared. Or, perhaps the shroud could be formed in sections welded together. I would hate to think about whittling the parts out of solid, like the rear sections in the photos.