If they could have made proper use of it and made a must have along with it, it probably could have been very good. It was the only reason I was interested in an X1 but I was waiting to see if it was going to be utilized.
This gen they will likely abandon it. MS tends to react to the biggest competition on the marketplace and so far it's the PS4 which is fairly bare bones. If by some chance the Wii U were to overtake both they would probably bring it back in one form or another in an attempt to compete, same as they did with the 360 to compete with the Wii.
I'm still sad they have removed it. It was more VR than VR is and they could have done some great stuff with it in a game like Gears of War with a ducking mechanic and even telling your squad directives like "fallback", "attack", "flank them", "cover me" or any others. Could have been great with a rainbow 6 as well. Lost possibilities if you ask me.