"The Matrix’s value is chiefly as a synthesis of all that. But there the set-up is cruder and does not truly evoke the problem. The actors are in the matrix, that is, in the digitized system of things; or, they are radically outside it, such as in Zion, the city of resistors. But what would be interesting is to show what happens when these two worlds collide."

This happens in the sequels, and it doesn't make for as compelling a story.