It is a hardware issue, in the way that those kitchen gadgets to peel eggs or neatly slice butter into perfect cubes are a hardware issue. The application is just not mainstream and the usability of it has built-in challenges that aren't about improving the specs.
VR is cool and I hope it remains viable for enthusiasts, but it's definitely not the next cell phone and it's never going to be as long as it involves strapping a screen to your face.