We don't live in a 3D world
Ever since the first science fiction about cyberspace (First seen in Clarke's 1956 "The City and the Stars" and more fully in 1976's "Doctor Who: The Deadly Assassin") people have wanted to build online 3-D virtual worlds. Snow Crash gelled it even further for people. 3D worlds have done well in games, including Mmorpgs and recently Second Life has attracted a lot of attention, first for its interesting world and its even more interesting economy, but lately for some of the ways it has not succeeded, such as a site for corporate sponsored stores.
Let me present one take on why 3D is not all it's cracked up to be. Our real world is 3D of course, but we don't view it that way. We take it in via our 2D eyes, and our 1.5D ears and then build a model of its 3D elements good enough to work in it. In a way I will call this 2.5D because it's more than 2D but less than 3. But because we start in two dimensions, and use 2D screens, 3D interfaces on a flat screen are actually worse than ones designed for 2D. Anybody who tired the original VRML experiments that attempted to build site navigation in 3D, where you had to turn around your virtual body in order to use one thing or another, realized that.
Now it turns out the fact that 3D is harder is a good thing when it comes to games. Games are supposed to be a challenge. It's good that you can't see everything and can get confused. It's good that you can sneak up behind your enemy, unseen, and shoot him. Because it makes the game harder to win, 3D works in games.
But for non-games, including second life, 3D can just plain make it harder. We have a much easier time with interfaces that are logical, not physical, and present all the information we need to use the system in one screen we can always see. The idea that important things can be "behind us" makes little sense in a computer environment. And that's true for social settings. When you sit in a room of people and talk, it's a bug that some people are behind you and some are in front of you. You want to see everybody, and have everybody see your face, the way the speaker on a podium would. The real 3D world can't do that for a group of people, but virtual worlds can.
I am not saying 3D can't have its place. You want and need it for modeling things form the real world, as in CAD/CAM. 3D can be a place to show off certain things, and of course a place to play games.
In making second life, a better choice might have been a 2D interface that has portals to occasional 3D environments for when those environments make sense. That would let those who want to build 3D objects in the environment get the ability to do so. But this would not have been nearly as sexy or as Snow-Crashy, so they didn't do it. Indeed, it would look too much like an incremental improvement over the web, and that might not have gotten the same excitement, even if it's the right thing to do. The web is also 2.5D, a series of 2D web pages with an arbitrary network of connections between them that exists in slightly more than 2 dimensions. And it has its 3D enclaves, though they are rare and mostly hard to use.
Another idea for a VR world might be a 3D world with 360 degree vision. You could walk around it but you could always see everything, laid out as a panorama. You would not have to turn, just point where you wish to go. It might be confusing at first but I think that could be worth experimenting with.