Earlier quoted context omitted.
Text needs to be really clearly defined and rapidly updated to accommodate head motion without being blurry. Slight offsets make it unreadable. Rendering people has a different set of challenges. Skin and hair and eyes have weird textures. Facial animations are difficult to capture. But its more of a solved problem than text.
I've looked around for images of Oculus rendering people, and perhaps I'm not looking in the right places, but so far I couldn't find anything that looks any better than the average window-dressing mannequin. Based on this, I wouldn't call it a solved problem.
It's not solved, but it's just not a particularly VR specific problem, and current tech is pretty good. The oculus doesn't have top of the line graphics capabilities and games tend not to go for photorealistic people. We can handcraft moments to jump outside the uncanny valley imo. We cannot do it dynamically at run time in a game. We can do a good enough job that I don't think it should matter and VR will catch up. It likely will not be good enough to mimic intimate facial movements. So... you know it's a goal setting problem mostly.
To a large extent we could make some photorealistic humans in VR, under some definitions, but we don't.