But the Vision Pro replaces nothing. It doesn't have enough of the computing so that people pair it with their Macs instead of replacing Macs.
Actually the M5 AVP does have enough computing power. And it will run iPad apps. It doesn't have the same richness of apps available as the Mac, but neither does the iPhone nor iPad. An AVP (even the M2 AVP) will absolutely replace a home iPad. It also replaces a computer display when paired with a Mac–and it does so with such stunning superiority that I no longer need 4 monitors. As for "can you use" vs. "can you reimagine", the AVP has completely changed done exactly the latter. The limitations you are seeing with the AVP is that it is an early-adopter Pro device. If you aren't using your computer many hours a day, then you won't see its value. You'll just have to wait until the technology advances so that you can use the device more casually.
The upshot is that you might want to rethink your thesis that Apple has fallen off its path because the AVP doesn't cannibalize the Mac market.