The VirtualBoy was an insane idea that was a whole human generation ahead of its time. That’s rare and credit to Nintendo for trying.
And all the warnings about headaches and such were all overblown things to try to make legal compliance happy, but they had the effect of scaring away customers who did not understand that they were for legal compliance rather than actual warnings.
So how would an RGB Virtual Boy have turned out? Imagine a cross between the Game Boy Color and the 3DS.
1. Flicker. A 60hz scanout with no phosphor or LCDs to temporally smear the light out means a very raw image that's pretty hard on the eyes, which might be tolerable if...
2. Ergonomics were OK but they aren't. Needing to keep the thing on a table with your head hunched over peering into it is the opposite of comfortable. You can attach it to your head instead but then...
3. Simulation sickness becomes a problem. Fill peoples vision with a "virtual reality" without motion tracking and you'll start making people hurl.
Interestingly, the best way to play Virtual Boy games is on a Quest VR headset. The controls are a close match, it allows the use of greyscale (and other colours) instead of red and most importantly the VB's output is displayed as a giant screen fixed in space in front of you. I played through all of VB Wario Land that way, it was great fun and very comfortable.
The choice of Mini DVDs was baffling. I modded my Gamecube back in the day with a chip and a custom top shell that expanded the physical space to allow the use of full sized DVDRs (they were cheaper). The optical drive mechanism was still only sized for Mini DVDs, but full sized discs worked fine as long as you didn't burn past the edge of where a Mini DVD would end. That mod highlighted that they totally could have allowed for full sized discs without compromising on size of the console, cost, or anything. Just like ignoring DVD movie playback at it's peak, it seemed utterly dumb.
In the market it ran third after Xbox, which was released by a company that had never released a games console before. That's pretty embarrassing for Nintendo.
Also Super Mario Sunshine is just terrible.
Still, it underlines that Nintendo's output isn't all hits and never has been. Their add-ons in particular are usually busts.