Well, hindsight is always 20/20. When Oculus started, focus on the sitting user with a controller sounded like a very sane first step. There were no good large area tracking solutions available for $100-$200 (the cheapest "pro" starts around $2000-3000 just for tracking). Remember STEM? That was supposed to be the solution.
The concept of "room scale" consumer VR didn't exist until after about 2 years after Oculus has been committed to their system already. I am sure they would have gone with it if there was a robust tracking solution available back then.
The lack of "room scale" is not a problem. The tracking actually works OK for reasonable room sizes (I have the Rift CV1).
The killer is the lack of tracked hand controllers (the non-interactive demos in the Oculus Dreamdeck where you can only passively watch but are unable to do anything are totally ridiculous) - why they didn't bundle at least the Razer Hydra with the headset when they saw Vive being released complete with controllers and their own are delayed until late this year is beyond me. Even a poor motion controller is better than a gamepad. I have used Hydra with my Rift to play with the SteamVR Lab demos and it worked fine for the most part.
The second killer is poor/non-existent content. Right now all you can get are some silly games that will bore you to death after few minutes - even Eve Valkyrie. Eve looks stunning, but ultimately it is just space deathmatch in a small arena with invisible walls and *A LOT* of prodding for you to pour in real money to buy stuff. That gets boring fast. Paying $60-80+ for a platformer only because it is "VR"? (aka you see it 3D and can look around but there is nothing more "VR" than that about it). That's just crap.
They seem to be heavily invested in 360 degree "VR" movies. However, they can't even get the short clips that are bundled with the Dreamdeck right - often poor resolution and short, limited content. Like, few minutes of watching waterfalls from the air, from National Geo ... It is totally non-interactive, the only thing you can do is to look around. The quality often sucks too because the clips are upscaled for the high resolution of the Rift. Watching a normal movie with the hot, fogging up, sweaty headset stuck to your face? They really think someone will want to actually do that? Yet it is offered ... I just don't see anyone who would actually want to watch this stuff beyond trying it out and to actually *pay* for it.
The Vive content, in comparison, is actually fun, even if you don't buy anything and just tinker with the bundled demos from the Lab. Heck, that stuff is fun even if you use it with the Rift and Hydra (which actually works, unlike Oculus' platform locking out Vive users).
Finally, what has actually the chance to sour people over their platform before it had even chance to take off are the recent boneheaded moves with the preorders, shipping, the DRM issue, etc.
The "lack of roomscale" is certainly not the issue with the Rift ...