VR hardware and software are in their infancy and you simply can't have very crisp graphics at this stage
As an occasional video game developer, I’m going to strongly disagree with you there. To give a counter-example:
Walkabout Mini Golf is a VR game that runs on Oculus Quest, Rift, and Steam VR, made by this fairly small studio (and most of the people listed there didn't even work on the game) [EDIT: I reached out to the studio on Twitter and it turns out the game was mainly developed by a single guy, Lucas Martell]. It looks like this:
I've played this game with a friend of mine (who shows up as a stylized floating head that looks pretty great), and it was crisp, clear, high frame-rate VR perfection. Even in multiplayer, everything works smoothly, and it serves as a really nice virtual social space.
Having limited graphics capabilities does not place a significant limiting bound on aesthetics. As another example, Anodyne 2: Return to Dust is a jaw-droppingly beautiful game (developed by only two people!) deliberately made with PS1-era graphics:
Simplicity does not necessitate ugliness.
Rather, he is surrounded by employees and journalists whose primary complaint is that Horizon Worlds is not sterile enough.
This may very well be true (despite my personal distaste for that line of thought), but even if it is, being inoffensive and "bland" doesn't mean you have to look bad! Nintendo's oeuvre, for instance, shows that being friendly for all ages doesn't require sacrificing aesthetic beauty. Meanwhile, in screenshots online and in the "selfie" Zuckerberg posted, model sizes are wildly inconsistent (look at the trees—or is that supposed to be grass?—on the ground), the clothing of avatars are almost surrealistically bad (why is Mark's top button so far off to the left?), the shading is worse than what I could make in half a day with Unity when I was 12, and overall everything manages to look more slapped together than this notorious disaster of an asset flip.
I can't help but feel that on some level this must be intentional, or at least the result of some absolutely horrific mismanagement.
What's going on with Meta? The other day Mark Zuckerberg posted a screenshot from Horizon Worlds, a supposedly central Metaverse project which is currently being dunked on by the internet like there's no tomorrow. And for good reason too—it looks horrible. Like, really incredibly horrible. I'm not sure I can communicate just how bad it looks in fact; just see for yourself:
And this is what Zuckerberg posted publicly—from what I've heard, in the actual application nobody has legs (possibly so simulated sex is impossible?), but chairs abound...the whole thing seems to be a surreally bad mess.
Meanwhile, earlier this month, Meta released BlenderBot 3, a chatbot which somehow manages to be a less realistic user experience than chatting with ELIZA. I tested it out, and it was so much less coherent than even GPT-2 that I was shocked the thing was released in the first place (it classified me as a Christian fundamentalist??). Turns out it also has a slight problem with misinformation as well...
So what's going on? My gut feeling is that this has to be on purpose. I mean, it would be pretty hard to make something as ugly as Horizon Worlds if I tried, and BlenderBot is so inferior to the state-of-the-art right now that it almost feels insulting. I'm having trouble imaging a scenario where a multi-billion dollar company would publicize this without realizing what people's reactions are going to be. However, if I try to imagine scenarios where it would make sense to make it look this bad on purpose, I still find myself confused. What would be gained from doing that?
All of this is to say that I'm currently befuddled by Meta's behavior, and am publicly noting my confusion here. If anyone has any insight into how this sort of thing happens, feel free to comment!