Likely to get really immersive gaming you will need a lot of tech. I've been following this tech fairly loosely, but here's a price range for what I've seen (including this product):

1. 1. Omni motion "trackpad" -- $500 (or similar product)
2. 2. Oculus rift headset -- $350 (devkit2 pricing)
3. 3. Razer Hydra or similar -- $140 (priced from here)
4. 4. playstation move motion controller -- $70
5. 5. at least commodity laptop worth of components to power it all -- $450 (based on middle tier notebook here)
6. 6. At least basic surround sound or decent headphones -- $90 (here and here)
7. 7. A decent gaming computer ~$1500

So that brings the overall price to ~$3,100 if you don't already have a gaming box and ~$1,600 if you do. Plus the const of your living room. This is totally in price for a lot of people. It's all available in hardware form now (to varying degrees of "done").

The major problem is what you pointed out: it will eat your living room/den. These costs and tech are also only for one player and you might get interference/tracking issues with more than on person in the same room. Only people who have solo/networked gaming as their primary form of entertainment will be willing to to make this trade off (that still is a lot of people). BUT, it's super affordable from a business aspect. Take a building, divide it into sound-proofed closets. Put one of these units into each of said closets. Have a desirable set of games (could even be one a la LaserQuest) that people want to play (or with telepresence bots: virtual tourism! (project tango?)) and it's really something to get in on. You could also see it used easily in therapies, spas (walk through a beautiful garden), military training (not as good as the real thing, but decent),and whole lot more.

That said, businesses won't be willing to invest in this without content Just like 3D movies and TVs, the life and death of an entertainment technology depends on the content available to it. There are a lot of companies jumping on the VR bandwagon right now. I think there will be a good set of initial IP that launches with these products or it will integrate with previous games (Skyrim, etc.), but there has to be something that makes you throw your money at them.

Overall, it's getting cheaper, faster and better. I think within 5 years everyone will know someone who has VR in their house.

I think it happens for a number of reasons and blame goes around the table.

A degree (singular, as in BS, BA, etc.) is useful for getting a good job. It helps you mature and tells employers that you can follow directions and complete complex tasks. It's very forgivable if people chose the "wrong" undergrad degree and end up not working in a related field. If I remember correctly this number is substantial in all fields of study. If you pick a college with good cost/value for you (including any grants and scholarships) it's not hard to end up with minimal debt that an unrelated job can pay off.

Colleges and departments though, get funding based on all sorts of metrics including number of students. So they try to get as many talented students as they can. As an individual professor, you love your field of study (and knowing my some of my profs are basically married to it) so when you see talented students go by you want to encourage them to continue following in your footsteps. On a more pessimistic note you get cheap to free labor from these same students.

This is where things fall down. Students are being told they're talented (which they could be be) and teachers and departments want to see them succeed and need them to keep funding. Nobody tells these students that it's a numbers game, and some of them who do hear it are likely to think "but I'm different." Add to that the fact that people go to college outside their ability to pay them back and you get problems like this. MA, MFA, and Humanity PhDs fighting over faculty positions or working at the local McDudes.

Disclosure here: I have my MS degree in CS. Went to a community college, then regional state college, and got my masters from a respected private college without incurring any debt. (dropped out of PhD candidacy for employment and personal difficulties with my advisor). I know it's easier to get money in the market as a tech grad given increased relevance industry, but that doesn't mean we should automatically push people away from diverse undergrad degrees. I think we need to fully disclose the odds to students earlier.

A paraphrase of a joke I heard from a history major: A plane crashes with 100 history professors, PhD students and post docs rejoice over new openings.