To have a headset that doesn't make people sick, 60hz is nowhere near a high enough refresh rate. For something with "reality" in the name 1080p isn't a high enough resolution. The displays are too close to the eye and it's easy to make out individual pixels and more importantly the gaps between them [0]. High pixel density displays are a must.

A 480p game on the Wii is still a playable game. An art style that leans into the low resolution will also look fine. While it might not have looked as good as a PS3 it's still playable.

A VR headset with imprecise orientation sensors and a slow refresh rate will make you sick. Your visual input won't match what your proprioception says about your body's positioning. Even if you manage not to get sick such a system isn't usable for non-trivial durations. A low end VR system is not worth any amount of money because it's not practically usable.

[0] https://en.m.wikipedia.org/wiki/Screen-door_effect

Nintendo offsets lackluster hardware with exceptional games. The end result is Nintendo rarely becomes the outright leader in any hardware segment. I agree they are successful, but I can't recall when they last "blew away the market"

5 out of the top 10 consoles sold of all time are Nintendo. They are the outright leader and always have been in handhelds and the Switch has been the best selling console for the past 2 years

In the past 2 years, Sony has been cannibalizing the PS4 with the PS5.

Nintendo is the only major player in the handheld category: of course they're a "leader". The success of the Switch supports my prior point: it's a warmed-over Nvidia Shield that has very mediocre hardware (Tegra X1 - Maxwell arch), but has amazing first-party games on it. BoTW is one of the best games I have played.

Virtual reality is different than gaming hardware. If the quality is too bad you may get motion sickness or not experience immmersion. There is a certain quality threshold you need to cross, similar to the uncanney valley you experience when looking at virtual human avatars.

Yes, cables are also something that lowers immersion.

It's not an either-or. It definitely needs to be wireless to truly take off, but resolution and refresh rate requirements are also required to provide an enjoyable experience.