But the screen isn't OLED, it won't grow more pixels organically over time.

1) Does VR make sense on a portable system?

2) Does VR make sense on a relatively underpowered system?

Make. It. Cheap.

Everyone has been doing VR wrong, Nintendo. Make a product for the mass market, and you will dominate VR. Make it $99 and bundle in a game like Pilot Wings while having a big game like Metroid release alongside it. Profit.

Sounds like a good idea. Rather than rush into the market, better to take it slow and study on it. Plus, as it currently is, I'm not really interested in VR and likely won't be for a long time.

Do a google cardboard thing with the Switch touchscreen. Do it!

For it to be successful in the mass market, 720p is more than fine. Most people have never tried VR, and when the cheapest premium dedicated device is $400 with mostly tech-demo games, that's not going to change anytime soon. The mass market doesn't have standards for VR, yet. If Nintendo can get a product out for cheap, which they can because most of the necessary components already come with the Switch at the benefit of being wireless, Nintendo can dominate VR, no matter how inferior it is.

People went crazy over the Wii even though it was still in SD with ugly games. Why? Because it was cheap enough to be a novelty. The Switch can do the same exact thing. They can realistically release an HMD that's around $100 because the most expensive components are already on the Switch, with the added bonus of already having motion controllers. No premium VR headset out today can compete with a $100 headset. Maybe the PS VR will be $300 by the time something like this came out if we're being generous. It can't compete, especially if the software output is a "tech demo-y" as it has been, outside of games like Resi7.

People won't care about a screen door effect because the illusion is still there. The original Oculus dev kit was 720p, and it blew people away. What Nintendo can do for VR that no one else will right now is make VR accessible (via price) and give it killer apps (via software). Sony isn't putting big money into VR software. Valve isn't. Maybe Facebook is, but they don't own mass market established IP. Nintendo can. They can and would be the one's to make a Pilot Wings, Metroid, Star Fox, F-Zero, Mario Kart, etc onto Switch VR with heavy VR implementation because that's literally their specialty - making games for unique hardware.

Yeah the experience is objectively worse, but for $100, you can play Pilot Wings in VR, with Metroid VR here at launch, VR patched into Mario Kart 8 Deluxe, and F-Zero coming to Switch VR next month, with Star Fox VR the month after and so forth. That's what Nintendo can do that no one else is willing, or in some cases even able, to do.

I honestly think there will be an enchanted Switch on the future with this purpose in mind.

"users can play for hours without problems"

Battery? Weight? Motion sickness? Calibration?

Well, there is another way.  What if instead of strapping it to your face, yoi bought a headset and VR dock and the Switch wirelessly streams the game to the headset using a more advanced version of the tech used to do offscreen gameplay on the Wii U?  For the base Switch I think that's the logical option.  The other is to launch Switch VR as part of a hardware revision, like a Switch+ that is substantially more powerful with a better screen.  I could see that in 2020 or so.

Counter argument: Virtual boy

That made may people very sick.