Let's call it the first iteration of this generation then. (And incidentally, Gen 1 wasn't in the early 80's, it was in 1968[1]). There have been incremental improvements in VR throughout the history of computer science, much as there has been for many technologies. At some point, the technology catches up to the vision and it becomes viable. That's where we are today.
It's not merely graphics that make today's VR better than VR in the 90's - and actually viable. There has been a confluence of enabling technologies including:
- High bandwidth internet
- High DPI OLED screens
- Development of VR-specific techniques such as low-persistence pixel strobing, rolling shutters, pre-warped images, asynchronous reprojection, etc.
- Computer vision developments for 6 degree of freedom tracking
- Submillimeter tracking of room position for the VR user and his/her hands
- Fast GPUs to allow for consistent 90 frame per second display
- Cheap precision manufacturing for complex systems
- Lens technologies
- Lightweight materials
- Capacitive touch technologies to enable finger tracking
- High bandwidth I/O ports (USB3, HDMI)
- Fast, cheap CPUs
- Widely available Graphics engines and toolkits to accelerate and democratize content development
None of the above were available in 1998.
Yes, one important result is better graphics, but the sum total of the above is an experience where your brain forgets it's inside a simulation. This comes from low "motion to photon" latency such that your movements track 1:1 with the virtual world, "good enough" graphics (but could be better), a wide enough field of view (but could be wider), and so on.
People didn't buy VR in the 80's, or 90's, or 00's, because it sucked. The technology wasn't there. That is no longer the case.
Future iterations in this generation will widen the field of view, further improve pixel density and brightness, lower weight, reduce cost, and increase portability - all important evolutionary steps that incrementally improve the experience.
[1] https://en.wikipedia.org/wiki/The_Sword_of_Damocles_(virtual...