I recall the same about the size of a phone in hand a few years after that and we haven't seen a sub-5" phone really sell well in how long?
Without changing phone size, most of my friends now have bigger or equal sized phones, and I've gotten at least one 'you told me so' since then.
I'm not sure I agree. Many complained of motion sickness playing early FPS games, such as DooM or Descent. I wouldn't be surprised if it just takes an equilibration period to get used to the devices. Either way, unless there is actual research that shows a large portion of the population actually has difficulty adapting to the device, I don't believe the tech is fundamentallying flawed.
>only a lucky few are totally unaffected by it
That is true, but what you aren't covering here is that when software (and hardware) is properly designed, almost no one is affected by it! Vive games with physical locomotion do not have complaints of sickness.
VR has been the next big thing for twenty years. It's not a niche technology because of Luddites, it is a niche technology because it works against human physiology and only a lucky few are totally unaffected by it. You're targeting an audience of people who find your product merely tolerable.
And since there are no social constructs or visual cues around this division of humans, you'll never get a network effect like you might with, for instance, a pair of pants designed for very tall people.