Rhythm, exercise, boxing, fencing games are second to none in VR thanks to the medium itself. They are much more compelling in VR vs jumping in front of a television set while waving a pair of Wii wands.
The reason VR is struggling is the same reason that most exercise games eventually struggle. Humans are lazy and prefer sitting on their asses and click buttons with near zero muscle activity.
But how many people play wii sports? It was awesome fun, super novel, and was huge for a while there but now it's died off. It'll be interesting to see if VR does the same. One thing going for VR is that there's more than one company making stuff.
The problem with Wii Sports is that you couldn't make it a high intensity workout. High intensity workouts are a reality in VR. This is just one example out of many
The Oculus Quest 2 is $299 and it fits inside a small case.
I'm not sure if you're joking or not, but your alternative is a giant, heavy, antique that's hard to find and that probably costs a few thousand dollars not including maintenance; and it plays only one game.
I would highly recommend at least trying modern VR (Google Cardboard doesn't count) before having a stronger opinion on it
Wii Sports was always a pretty casual thing with middling motion tracking ability at best. Something like Beat Saber on a Quest is an enormous improvement in terms of how compelling it feels.
The reason VR is struggling is the same reason that most exercise games eventually struggle. Humans are lazy and prefer sitting on their asses and click buttons with near zero muscle activity.