Coding + decoding induces latency and should make reprojection techniques harder to achieve.
And let's not forget how all video compression (except for DSC) crushes darks and blacks, which renders it utterly useless for any game with a dark visual style unless the game knows to compensate for this somehow.
Look at the VirtualLink port. The technology was never deployed by VR HMD manufacturers and the port disappeared after a single appearance on Turing generation cards.
True, but then VirtualLink was a technical abomination (not compliant with the USB-C spec due to reallocating the USB 2.0 lanes, which isn't allowed) and has been functionally superceded by plain USB-C with alt mode support. There's definitely a chicken/egg problem of GPUs not having USB-C outputs vs. HMDs adopting the port though, as DP/HDMI-to-USB-C adapters are rather expensive and somewhat complex, meaning you can't just bundle them cheaply. I definitely hope we see more GPUs with USB-C outputs though.