Tools and technology are neither good or bad, it is what we humans do with these tools that create our reality.
Yes, we could fill children's heads with a false reality, but on the contrary we can also provide education that is 100x better to the entire planet.
So yes, we certainly can do amazing things, but more often than not, someone in the boardroom will eventually ask: "where's the profit?"
Just think of Facebook's Open Basics. They could afford to provide the extreme poor with the full internet, but they chose not to, since using Facebook at least would help the company collect more data and sell more ads. That was a deliberate choice.
That's because these entities are businesses, not charities. Their primary purpose is to generate profit, and the board is there to ensure that they do that. To expect a business to act like a charity is not reasonable.
This is why we fear such leaps of technology, because the people doing it lack empathy and sympathy in place for profits.
Here's the thing. What one generation imagined as "Utopia" keeps on happening in limited contexts. But by the time it becomes reality, the conception of "Utopia" has changed. It's a moving target much in the same way hard AI is a moving target.
Today, I live in a world where I not only have to worry about getting enough to eat, I even have to worry about getting too many calories. In my society, poor people worry about that more! I don't have to worry about physical safety. I don't worry about disease. I have access to almost any information I want, including entertainments that even kings and queens could never have imagined.
Pick some level of baseline security for some 1st world industrialized nation. If you described that to Sir Thomas More or John Stuart Mill, and told them how many millions have it, they'd think you were talking a pipe dream.
Inequality is always the big problem, of course.
Of course, cynicism is good for the tech. It's a way of making sure we know what we're doing.
From what I've seen, it's not the "murder simulation" that's the most significant. It's the spending of so much time within world-like environments where an amoral stance is consistently rewarded.
I've known people who have formed their moral framework almost exclusively from their experience within such environments. I've even known people in positions of power, who exercise power accordingly.
Games and VR environments are simply media. Media does have an effect on how we see the world, but it's almost never in the simplistic way that alarmists come up with. Rather, it's subtler, but it is certain to be there.
This is a problem of separating fantasy and reality. If one understands that, say, Doom is a fantasy that does not work in the same way as the real world, then you won't have trouble realizing that you can't solve your problems with a well-timed shotgun blast while running at 90 miles per hour.
On the other hand, if you don't stop and think about how different Doom is from the world, then you get headlines about how Doom caused two teens to shoot up a school. Which, incidentally, is a bad example--the two teens you're probably thinking of were also neo-nazis, so it's far more likely that they played Doom obsessively because they wanted to kill people, and far less likely that Doom drove them to kill.
What this guy needs is a rude awakening. And, hopefully, he will get one.
There's your answer. We fear what other humans will do with these tools.