The phrase I kept hearing from film studio/director types was that they didn't know how to tell a story with VR that could only be told with VR (profitably). Note that didn't stop them from trying and there wasn't a shortage of ideas. The point was that they hadn't figured out what would actually resonate with audiences (and make more money than doing what they already knew).
But things are different now. Back then, the problem was that VR in your home was a dead-end. What seemed promising was using it for theme park rides and people at Universal/Disney were super excited about it. So the "story" they were trying to design was something that was mass marketable with IP tie-ins, short enough not to tire the average American and maximize throughput while also minimizing floor space in the places they'd install. That's a very different kind of experience than a film or video game.
I think with cheaper/lighter hardware the profit model could be different and the kind of content you consume with it would become different. I don't think people have figured it out yet, but with hardware changes there's a different kind of story that can work and it just needs the right storyteller to figure it out.
All that said, the problem all these tech bro led companies forget is that content is king in this space and you can't just make some cool gizmo and expect people to buy it when no one knows how to create for it. For all their flaws, Magic Leap was actually smarter about that than their competition.