It's not too surprising that sales are bad, the V1 hardware is pretty terrible in various ways, and the cost all in is ~$1400 for a PC system (cheaper for PlayStation but not
that cheap). At least management at Facebook and Valve have been very clear that their expectations for V1 were not high.
If you look at tablet PCs, Microsoft didn't capture much market share with early $1000+ systems with non-touch based software, but there was still room for the iPad to come in at a lower price and be a successful product.
I think the difference between a (not-terrible) mobile system like the Quest at $400 and existing PC based systems is at least as stark. BTW I didn't hear of anyone getting motion sick, but neither of the Quest demos had any artificial movement, and people weren't using it for hours.
Of course there still needs to be content with some sort of appeal. That's pretty subjective. I liked the tennis demo I had, the lack of a cable made quite a big difference and the lenses aren't nearly as fussy to get a clear picture. I'm not a big gamer but I like being active IRL and playing table tennis etc. I don't know how big a market that is. But I could see myself buying one at $400, not as a developer, if it had a variety of that sort of stuff. None of the other systems I've tried get remotely close to that, in terms cost/inconvenience for what you get.
I'm also curious about movie watching. I wouldn't use existing systems for it, but a higher-res mobile system with better lenses (and hopefully a native Netflix app)? I'm very curious to see if it's a practical thing yet. People watch lots of shows on their phone, it doesn't seem unthinkable that VR could have some appeal for that.
If they have decent content, I think they will probably move more units than VR systems have to date. But to think about the Wii again, even though it was successful as a device it still didn't end up having a major long-term impact...
I don't think just the numbers matter in early stage hardware while there are still extreme qualitative differences. You see companies that focused on cardboard/GearVR based on that sort of reasoning, even though that had an even less likely future as a platform than fully-tracked systems. The Palm Treo wasn't a mass market product, but that hardly doomed smartphones.