I'd call it great choice. They wouldn't have been able to make nearly as much money on a purposeful, targeted device, because nobody's put in that much money for a narrow market. Worse, it would have been much easier for investors to figure that the more modest product would fail. Much better to sell moonbeams, to sell the glorious possibility of AR just like they saw on Westworld and Black Mirror.
I mean sure, the wheels had to come off eventually. After a while, you run out of fools. But most startups fail eventually, and you have to admit that 9 years is a great run for something that never worked, and probably never could have worked.
What's the point of crappy half dim see-through display when you can just pipe the camera output to a normal VR screen?
For different definitions of "very far away". We're only talking about 15 years since we started getting proper video recording in phones, and only about 4 since the big players started focusing on software enhancements.
If there was even 1 amazing game, they'd be ok. Think halo->xbox, sonic->sega, mario->nintendo+gameboy, ... .
But apparently not. Nothing people want to buy.
There are tons of ways to implement AR. They chose 'general AR', the kind of thing you see on Westworld or Black Mirror. That was a bad choice, because the tech isn't there and won't be for a long time, and it only follows that the implementation was going to be bad.
There are alternative ways to find a good v1 for AR. Take a look at this tweet storm for more of my thoughts on what that could be: https://twitter.com/nickpunt/status/1253087195159654400
As far as VR goes, it's further along. Quest is a quality stand-alone product, but VR is young and content is still lacking. Its also completely sold out, even before coronavirus. They aren't producing them in Sony/MS console numbers but its not a failure, just a stepping stone to success. Unlike the Rift or Vive, with cords hanging out of them and an appeal only to hardcore gamers, Quest is definitely on the path to mainstream, or mainstream-adjacent success.