It's a moon shot, but I wouldn't call it dumb, it's actually a pretty obvious business decision. Keep in mind, Oculus (now being rebranded as Meta) is currently the preeminent VR platform and has sold more devices than every other competitor combined. This is a potentially huge opportunity for them to expand their social media reach into a completely pristine market that they already dominate. Meta is in a unique opportunity to define the future of VR, it'd be dumb not to try something like this.
Of course, none of this addresses the abysmal branding or Meta's horrible reputation or the public's perception of Zuck as the herald of a technocratic dystopia. I also agree that VR will indefinitely remain within the realm of videogames, and gaming is not in Meta's DNA which I think will probably be their biggest barrier to success. Still... they own the VR market, they also have plenty of cash on hand, and that goes a very long way when trying to make the impossible possible, e.g. the xbox...