Short of inventing the holodeck out of Star Trek, I can't possible seeing that being entirely true as it's not quite the same as being physically immersed with more than one's eyes.

Oculus Rift would be useful in those situations when you want to switch between say a WW1 flight sim[1] and a modern day one. It would be a little jarring to be flying a Fokker Dr1 in from the confines of an F-16 cockpit (well unless you want to pretend you went back in time and suddenly your mach 2 jet fighter must obey the limitations of 1917 aviation). The cockpit + Oculus Rift would at least dampen the sense somewhat of being seated in a modern day cockpit without having to build two (though building a modular one that you can swap the cockpit part in and out might be an idea). Maybe add a programmable fan blowing in front of you that adjusts its RPMs based on velocity to simulate wind effects :)

[1] http://store.steampowered.com/app/244050/?snr=1_5_9__205

Except that this project seems to be mainly about providing realistic controls (switches etc.) which the Oculus Rift can't do much about.

I've worn an OR, and without physical feedback even games where you are strapped into a cockpit or driver's seat are lacking. Seems like this kind of thing will be made more popular by the OR.

Au contraire, this is the perfect complement to the oculus rift for physical feedback.

What buttons will you push?

One's made of wood, the other is made of vapor...

I suspect the long term effect will be much like simulators have displaced some recreational real world flying and training, but not as much as you'd think.