Since you mentioned LSD, I wonder if technology like this could one day replace hallucinogenic drugs? At least partially - I'm sure some people will always prefer the chemical experience. I've always been pretty interested in the effects of hallucinogens, but could never bring myself to try any of them due the potential risks.

I wonder how much "your brain actually believes it's all real instead of merely perceiving it" matters... I know there have been a few times where I've gotten so sucked into a movie in a darkened theater that when it ends its incredibly jarring to be brought back to the real world, and the times that's happened to me haven't even been 3D movies, let alone interactive like AR.