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number 1: the cost for a vr set is insane and unnecessary
you can easily create an avatar without a 2000 dollar headset that gives you a headache to use
number 2: the userbase is tiny
not many people have a need for vr other than as a novelty
number 3: it came before ai
when ai is able to generate realistic avatars and environments people will be jumping to get into vr but until then the cheap quality of vr environments will keep vr as a childrens hobby
Plus, even though humans only have a narrow clear field of view they have a wide peripheral awareness so unless you are precisely tracking eyes and rendering in unnoticeable realtime you'd need at least 8K if not 16K video in clear resolutions at all times - a high cost.