The iPhone wasn't realistic with 2007 technology. There was no multi touch display with that kind of fidelity that could be built at scale and affordable for the mass market or a chip capable of running desktop class internet on a phone. Apple took upcoming technology and packaged it in ways that met the vision they had set for it and solved for other impossibilities by leveraging the fact that they're vertically integrated, making both the software and hardware and could scale OS X to work on a phone.
You're not thinking three dimensionally. There are real world applications for this, you just need to stop trying to apply today's reality to tomorrow's technology. Microsoft followed that model, thinking that a smart phone was just a Windows PC on a smaller screen. Apple instead reinvented what a pocket computer should be, dropping the cursor concept which was created for use with a mouse (which others simply replaced with a stylus) and invented an entirely new input method and UI made specifically for a touch screen with multi finger gesture capabilities.
The original iPhone was what $499 I believe (edit: $499 4gb, $599 8gb)? They did an incredible job for that $499, but of course the iPhone only continued to improve. For the rumored $2-3k their headset will release for I don't know how much room there is to make it affordable at scale. It may be enough of a hit to sell for $2-3k, certainly Apple has hardware that sells for that kind of money, but will people really pay $2-3k to wear ski goggles and carry a battery around? Personally I don't think so, that's why I think it's more for industrial applications.
It's not that I'm not thinking about how AR/VR goggles *might* look in the future with miniaturization and technology, it's because I'm envisioning them how they will look in 2 months when (maybe) they are announced, and probably for the next 5+ years (unless you think they have some secret technology that all the other AR/VR makers are not aware of or haven't invented yet). Consider this, even if someone got AR/VR goggles to be as small as a regular pair of glasses there would still be significant hurdles for many consumers. Pie in the sky IMO are contacts, yes there is a company which already developed something like this but it's still really early stages and I shudder to think of the cost.
Finally I don't think the ecosystem is there, and changing that will take a long time. Look at Maps, it took years to really change the paradigm from viewing maps on your Garmin device to navigating full 3-dimensional structures and locations on your smartphone and having turn by turn directions on your watch, and it's still a work in progress. Things like simply overlaying a restaurant's menu onto your AR display are going to take a lot of time to get right, and even then it will take that much longer to make sure everyone's information is listed. Finally you have the thorny issue of privacy which still has to be tackled.
Again, I'm not crapping on the entire idea, I think AR/VR is most definitely the future, I just don't think it's June 2023 and looking like ski goggles with a dainty leatherette man bag.