I am curious -- why the 1:1 aspect ratio/FoV? A quick Google suggests the human eye is more like 5:3 (though vary variable).
* Square displays are what's readily available in the VR form factor (2-3" diagonal)
* Rectangular displays will murder your minimum IPD, which kills accessibility for a lot of users
* Reducing the size/increasing pixel density makes the optics exponentially more complex. We're already pushing the limits of what's possible without pancake lenses.
* Pancake lenses are a nightmare of complexity when you want high-quality images. Ghost images, low transmission, etc. all increase development cost by a lot. And the unit cost is significantly higher, but that's not an issue here (the NREs are the main cost driver)