Here's the saddest thing anybody's ever said about virtual reality

I was catching with a Silicon Valley venture capitalist recently, and we were talking about his firm's recent investments.

He told me he'd made some investments in virtual reality, but none in augmented reality. "I don't believe in augmented reality," he told me.

A quick catch-up on those terms: Virtual reality puts you entirely in a computer-generated world. You're cut off from reality inside a bulky headset. The main players here are Facebook's Oculus and the HTC Vive, which uses technology from game tech company Valve.

Augmented reality superimposes computer-generated images over the real world. You usually experience it in the form of glasses that let most of the real world in, but then beam some images into your eyeballs so they appear to be floating in space. Leaders here include Microsoft's HoloLens, and the mysterious startup Magic Leap, which received a $542 million investment led by Google last year.

I've tried both, and I like augmented reality more.

While virtual reality in the form of Facebook's Oculus totally blew me away, as it did many people, I was actually more impressed with Microsoft's HoloLens.

It seemed to have more real-world applications, and the idea of playing Minecraft superimposed on your coffee table is amazing. Plus, with augmented reality, you can "dial up" the computer generated images so they take up almost your entire field of vision, or scale them way back so they just show up in a corner or two. It seemed a lot more flexible and versatile than virtual reality. (Plus, I can't get over the dorky look of the VR headset.)

But this investor totally disagreed.

"Nobody wants to be reminded of the crappy apartment they're sitting in," he said. "People want to escape."

It was a good reminder. Most people who work in tech and entertainment live in pretty nice places. But that's not the case for the vast majority of the world.

We discussed some of our travels. I remembered a concrete cinder block building in Bali that rented PlayStations by the hour - the popular game then was Dance Dance Revolution. (This was in 1999.) He recalled a trip to South Korea where he saw people lining up to get into Internet cafes. They were mostly young adults, still living with their parents, and they just wanted to get out of there for a few hours."

To be fair, this VC has also invested in some much more optimistic technologies with a chance to change the world for the better, in areas like health care.

But the fact of the matter is, a lot of the investment here in the cradle of innovation is into companies that offer nothing more than escape. That's good business. But it's another example of Silicon Valley's current identity crisis, where saving the world is always competing against the next shiny bauble.