Yeah that's why I never used the whole desktop either, only if I need to change a setting during VR gaming like the audio output device that doesn't always auto-switch to the Oculus Audio output. I never noticed you could show apps separately like this, cool!
There is a fundamntal tradeoff between FOV and image quality at any given pixel density (and there are other tradeoffs between pixel density and cost and compute power needed).
In what sense is that an answer to "why were they doing that?" The entirety of the answer does nothing but give a name to the policy. "Why" would usually be understood as a question about the reasons behind the policy.
"The government was subsidizing the abandonment of paper medical records because they had a program in place to do that" is something you knew before you asked the question.