Magic Leap is really cool to use. That doesn't mean it's a feasible product for the mainstream.
I suspect that the big difference here is, this being 1990, SNK didn't have nearly as much access to investment money from rich people who don't understand the what entertainment budgets look like for the other 99.99% of people. So it was never hyped as anything but a luxury product.
Yeah, I wonder if Magic Leap had started small and luxury, installing that Beast contraption with the undiluted experience to rich people, it could've grown more like Tesla. Of course, the Roadster ran on all the same roads, while whole new experiences have to be created for AR, but make a few great ones and it'll be like having a bowling lane in your house—you don't play with it except to show off to visitors. (Oh, League Bowling was the one game I remember playing on my friend's Neo Geo. He wasn't bowling-lane rich.)
Or Magic Leap could've licensed some Virtual Boy games.
Just to check things out, I rented a Quest over the winter holidays. There was very little content that was a) VR-specific, and b) so much better on VR that it was worth the hassle. After we sent it back, the kids never even mentioned it again; they're happy with their Switches and the PS4.
Game designer Jesse Schell said "If Oculus Quest can’t succeed we should just hang it up" [1] and I think he's right. The obvious technical problems have been fixed. It's technically very impressive, and it has a strong novelty rush at first. But if the current market isn't enough to drive the creation of must-have games, I expect it's a descending spiral from here.
Personally I play Beat Saber on a daily basis and pretty often other games as well.
Many people, like you, don't get it until they try it.
I also would hesitate to say they solve a common problem because the current market glut seems to be trailing a recent hype bubble of electric scooter startups.