The optical pathway is pretty much locked in. LEEP was invented in the 80s, and that's still the optical system used today. Compare the size to NASA's VR system from the early 90s. https://images.nasa.gov/details/ARC-1992-AC89-0437-6

It's been 30 years of massive improvements to all of the rest of computers, and VR has only shrunk a couple inches. There's not much else we can do to make it smaller.