> “The cloud” will always have too much latency to do acceptable vr.
Perhaps but you haven't established that.
> To meet your deadline for a 120hz video frame, your signal can travel at most 1500 miles in a vacuum, closer to 1000 miles in copper/fiber.
Edge computing is a feature of some modern clouds, and certainly is intended to have much lower round trip distance than that to at least major markets, specifically to reduce latency.
Admittedly, public cloud offerings don't tend currently to have compute resource suitable for hosting VR in their edge offerings, but it's certainly something a major cloud player supporting their own gaming/VR offering could do, and for that matter a feature that it is easy enough for public cloud vendors to offer if there was sufficient demand.