The developer said addressing those concerns is their "highest priority" and they're moving around their roadmap for it. The downside is that some big features that a lot of people enjoyed have been lost, since no modified clients can be run, and some people can't play at all due to it. Plus, they explained that every month "thousands" of people have their accounts stolen due to these modified clients.
They allowed users to "attack and harass others" which caused endless moderation problems. Why does such a social space need anti-cheat though? As they said in their announcement modified clients became a big problem. Recently though, they added in Easy Anti-Cheat and the community is currently very unhappy with it.
Despite the name, VRChat is not a VR-only space and it's incredibly popular.