I was not talking about applying VR to Shallow Space, and AR is another thing altogether, as I outlined. Besides the immersion gap, which is an issue for some people, but not for others, I see little reason strategy games couldn't be played via augmented reality, especially those with a high emphasis on 3D, such as Shallow Space or Homeworld.
It would remain just and option, but joysticks being just an option besides keyboard and mouse doesn't mean there are too few people who use joysticks or even HOTAS to play, say, Star Citizen to justify producing or supporting those devices.
The bigger question is whether the technology could already handle what the game in question demands of it, such as functioning as a "holo globe" set in space and displaying both the ships and the effects with a high framerate and resolution, as I suggested. AR technology may not be there yet, but AR has a wider field of applications due to being less restrictive than even a handheld screen, so it may grow enough to allow for that. However, Google Glass, though not strictly being an AR device ("non-immersive augmented reality") offers some caveats as to the widespread implementation of such things.
VR has been a distant dream of the media world for many decades, and VR would allow for the same spatial effect as my idea for AR (a hologlobe you can walk around in), yet with a skybox rather than localized assets. However, my own preference would still be with AR, because you can still see your body and surroundings while using it, and because it doesn't obscure your surroundings entirely.
While FPS can simply give you a body, walking around as a ghost in space for an hour or so apiece would be quite disorienting, I imagine. Stumbling over the VR headset's cable or some piece of furniture if you have a small room would still be a considerable danger then, even though you don't need to move much or very fast, so it would be preferable to use it in a fixed location, such as on the chair or one of those tracking harnesses some Kickstarter was funding a few years back to play FPS with motion control without needing much space.
Losing awareness of the surroundings would be another issue. I don't see the opposite, outside objects existing inside the game space as a problem because we just gloss over them with practice - the same way all the stuff around a screen doesn't distract us from the screen. This of course requires the game objects to be visually distinctive, but that should be the least issue.
However, with no objects besides the game content in the field of vision, I, at least, would be missing all those tiny distractions and the effort required to dismiss them, or the ability to easily change focus if, say, somebody messages me on Skype or Discord or my pizza gets done.
That is to say, I doubt removing VR headsets in one go when you were just playing a game is very pleasant, though I have only read about people having issues with disorientation or vertigo from using them. Considering what they do and comparing them to other things, it seems unlikely this will ever completely go away, so as of yet it isn't my preference in fancy new display devices.
It may be possible to support both devices however, if the difference between VR and AR was really just displaying a skybox covering the entire FOV rather than a "foundation" under the individual game assets, as I suggested. How well this would mesh with traditional screen support or how difficult it would be to implement in the first place, I can't comment on.