I absolutely agree that it's important that 3D is used to increase functionality rather than distract from the task at hand. Personally I'd expect that after a while, the 'wow' factor would become less important, leaving designers to concentrate more on how 3D can be used for real benefit. There are a whole world of possibilities in 3D that just aren't there on a 2D desktop.
Also, although Looking Glass may struggle, it's clear from 3D gaming that the graphics capabilities exist. Maybe the problems are a case of needing to integrate it properly with the OS?
Incidentally, I managed to dig out a copy of the Acorn 3D environment from an old Acorn CD ROM. It was called !Rooms. I've added some screenshots of it to my drobe album:
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