VR just seems to have built-in limitations that will always be a problem that can't be overcome. Some people get headaches using it. Some people get motion sickness from it. Some don't have room in their house to dance around with a VR unit without knocking into stuff or injuring themselves or others, because their view of the real world is severely limited, or non-existent, while wearing the headset. Some people are blind in one eye (like me) and so can't enjoy the main feature of VR.....stereoscopic 3D. I'm sure their are other physical issues I'm not considering that deter people from VR.
Then there's the software side....let's take PS5 and PSVR2 as an example. There are somewhere between 35-40 million PS5's in gamer's hands, but there's currently less than a million PSVR2's out there. (according to some quick Googling) So, someone makes a game for PS5, they have 35-40 million chances for people to buy their game. But with PSVR2, they have less than a million chances (currently) of people buying their game, especially if it absolutely REQUIRES the VR headset to play. And I'm sure there has never been any game that has sold at 100% parity with the number of platforms it can be played on. So that's limitations within limitations.
I can't tell you how many times I saw some game that looked like it would be really fun to play an was about to buy it, but then saw it REQUIRES VR, and I'm forced to go, "Nevermind"....lost sale of the game by default. And it's due to it being confined to a VR headset that I will never buy, or be able to enjoy properly due to my above-mentioned disability, not to mention the physical limitations others may have, as stated in my first paragraph, that prevent people from buying into VR in the first place.
With what it costs to make games nowadays, I don't understand why any company would purposely make games for the "by default" gimped sales potential of "only on VR", versus making a game that will play on a standard console or PC with many multiple times more chances to sell. I can only assume that people making VR-only games have been given some kind of upfront monetary compensation to make them. Otherwise, why bother?
So in this particular case, I 100% agree with the head of XBOX Game Studios point of view. It's not really practical.