That's because they've got all the enthusiasts they want right now. The S is clearly meant to bring more people into the VR market, not act as an upgrade for existing owners. It's a good option for people that waited to buy an HMD too long and don't want to get an old system that will be discontinued in a few months, and those that can't/don't want to deal with wiring up all the cameras/sensors. It also isn't a terrible option as a second VR setup. I have a Vive, and if I was really interested in Oculus exclusives and a little impatient, the S wouldn't be a terrible option.

I don't see the S as an upgrade or competing product, but as an option targeted for a specific market based on all the data they've collected. That said, I agree it feels underwhelming, going to LCD from OLED is a bad move, and I don't trust inside-out tracking to work as well as advertised.