To be fair, it was state of the art... five years ago. HoloLens 1 was an amazing feat of engineering. Yes, it was a terrible user experience, but we wouldn't have the latest hardware without it.
As for projecting the fingers, it is possible. It's just not a great experience. Nose-pointer is a (application level) compromise. I've built apps in HL1 where direct hand gestures are essential. And it's definitely a master interface. It's not something you can easily train new users on.
No question it was cutting edge, the spatial mapping feature worked 99.999 percent of the time, something which other platforms haven't come close to achieving.
As for projecting the fingers, it is possible. It's just not a great experience. Nose-pointer is a (application level) compromise. I've built apps in HL1 where direct hand gestures are essential. And it's definitely a master interface. It's not something you can easily train new users on.