I can identify two ways in which virtual reality (VR) can be harmful for us.
The first is probably the most obvious. When your eyes are completely focused on the virtual screen and you do not sense your physical surroundings, you might collide with them if you do not make enough room to navigate. These collisions could also injure you if you are, for example, to fall off something while you are standing because you did not detect a nearby object that made you fall.
The second way it could harm us has not yet arrived in our time, but when it does, it could be quite horrific. If VR technology advances so much to the point that the graphics are realistic, in the same amount of realism as in actual reality, we have the probability of failing to distinguish between virtual reality and actual reality, potentially trapping us in a constant metaphysical doubt of trying to decide in which reality we actually experience and belong.
This sense of psychological horror can be compared to the horror some people may feel after receiving a significant amount of facial surgery. When you have lived your life so far knowing how you look like, and then you find yourself to have a completely different face from the face you identified to be yours, it can lead to an identity crisis, equivalent to that of a really advanced VR technology.
Indeed, one of the things that can lead to the feeling of horror is not knowing who or where you are exactly. This sense of ignorance about how you look like and/or where you are actually in can often lead to people feeling scared, because these details are so elementary to our daily functioning that without them you are doomed to potential insanity.
Compare this feeling of horror to the horror of Silent Hill 4: The Room. Especially in the beginning, you have no idea where you are or what the hell happened to your apartment. The door out of the apartment is locked with many locks from the inside, somehow there is this huge hole in your bathroom that leads to various places you have never seen before, and every time you find a hole that brings you back home, you return to your apartment by waking up in your bed.
This illogical absurdity is, in my opinion, one of the most horrific metaphysics I have yet to encounter in any media; a horror that can be equivalent to a potentially dangerous advanced VR simulation.
