Off the top of my head:

1. Field of view is limited to existing optics miniaturization

2. Subtractive shading (rendering black) might not be solvable

3. Variable focus objects in the same scene requires projecting n>2 significantly different wavefronts - not solved how to do this with a single vibrating element

Do you know why an LCD panel can't be used to block light?

Which pixels need to be darkened to shade off an object depends on the distance to that object, and will also block the light coming from other objects at other distances. It's very inconvenient.

The LCD panel is too close and out of focus.

For example, close one eye and hold the tip of a pen about an inch in front the other and you'll see that it doesn't actually block any of the world.

The Magic Leap 2 does. It works ok. It's not as completely useless as armchair quarterbacks on line would have you believe. But it's also not the greatest thing. Objects are a little fuzzy around the edges and friend on the accuracy of the object surface detection. So moving objects can lag.

I'm not aware of all the details around the technical complications, but from a physics perspective, you can't make something darker and more opaque by adding more light. Therefore, an AR headset needs to be able to at least partially block light in order to make convincing images. It seems a lot easier just to go with Apple's approach of blocking all light rather than try to develop tech that will only selectively block the light behind the AR objects while allowing other light through.

The blocking all light approach also allows you to hide other potential weaknesses of a device. For example, a lower field of view is much more distracting in a pass-through AR device as you still have your full peripheral vision. VR devices will generally black out the light outside of the FOV making it easier to ignore.

> you can't make something darker and more opaque by adding more light

I mean... theoretically you can if you can match photon for photon with the inverse phase. Difficult, I know :)

It's one of those "small, low energy, bright, pick 1-2, definitely not 3" type situations.

Moore's law works great for semiconductors, but Maxwell doesn't negotiate ;)

Nobody has a good way to draw dark while keeping it in focus.

another follow-up, slightly tangent question: how does F-35's helmet do that without blocking all the lights?