Still in the early days.
The problem here is people's unrealistic expectations about what VR is and should be versus where we actually are right now. People want a Holodeck on their face and we are not at that point yet. People want AAA top-tier games and services but the installed user-base just isn't there yet.
Developers and designers are still working out how to present virtual worlds in a believable way; they're still developing the tools, techniques, and "language" that they need to offer better and more natural interaction with the virtual space. Motion sickness is still an issue with a lot of people; hell I generally have an iron stomach and on occasion I have felt a little nauseous playing some faster paced games. We still need to figure out what new tropes will apply to virtual environments.
It helps to think of early cinema - back at the turn of the last century, many movies were essentially YouTube clips ("Man Washes Horse" was a real nail-biter I'm sure.) But eventually the industry figured out all of the tools, techniques, and "language" that make movies into films. Framing rules, establishing shots, the 180° rule, split edits, traveling mattes, optical compositing, and so forth. You don't go from "Train Arriving at the Station" to "Star Wars" overnight. VR is just starting on that journey.
To put it another way, we're still at the Atari 2600 stage of the VR market; the tech is new and exciting and in your home for the first time and there are a lot of competing devices that provide varying levels of fidelity. The games are more simple and a large segment of the available software relies heavily on multiplayer being the driving force (no need to program an AI if you just make player two be another human) or is just sandbox style "play." Eventually we'll get to the NES/Famicom stage of the VR industry - I would guess that we'll hit this point in about 3-4 years - and that is when it is going to take off.
 - For me, the most compelling VR experience I have engaged in is a silly little "game" called "Room 202" in which you are being interrogated by two police officers and can only respond with a nod or shake for yes or no. There is a moment in the game where one of the cops tosses a photograph onto the table in front of you and asks you to look at it. When you lean over to get a good look, the game uses your change of focus to switch you into a flash-back moment at another location. It's an amazing trick - you're concentrating on the picture and when you look up again you're in an entirely different location. It feels extremely natural but at the same time delightfully surprising; a sort of "distracted transition." It's these sorts of techniques that need to be developed and refined before VR becomes what people want it to be.