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I dunno if TV is all that watered down actually.
BUT
The more I think about this the more I like it.
Compared to NOW...I don't see any downside.

The absolute worst thing that it can do pales in comparison to what's going on NOW with drugs.
and it would eliminate the drug trade and everything that goes with it.
how is that a bad thing?

The drug trade and all it's problems, stops -with no government intervention. (think prohibition)
Period.
(big phrama is still a problem, but in the realm of illicit substances)

Other people in my head, and deciding where I go.....an orwellian wet dream..

not exactly.
you're conflating virtual/augmented reality (much more complex)
with pleasure stimulation. (think induced orgasm..of indefinite length)
the former is theoretical
the latter has been possible for fifty years.
(brain surgery is a bit of a deterrent..but it's possible)