Yes, they were bought out. No, that's not terrible. It may not even be a crass money grab. It may have been their only path to survival.
The truth is that without a big money buyer like Facebook, many of us felt Occulus had almost no chance of relevance or survival, even in the medium term.
Like many small technical innovators, their product had become a prime target for the established manufacturers. Occulus was about to be under-priced and overwhelmed by entrenched, experienced, low-cost, quality hardware builders like Sony, Samsung, and Microsoft.
Oculus didn't build most of their own hardware, they built the shell, but purchased all the sensors and screens from companies who will soon be their competitors. Oculus would never have received the best component prices and wouldn't have any presence in the channel. Oculus didn't have any world beating patents, as most of the patents in this field are over twenty years old and no longer enforceable.
Sony has already shown a VR device that is superior in almost every way to Oculus's latest development. Sony has the funds, manufacturing expertise, retail channel, and gaming platform to immediately support their device. Sony could sell their VR headset for less than Oculus' manufacturing cost and still manage a profit.
Facebook brings enough money to give Oculus a chance. They will now have leverage, they will now have a massive marketing force.
Hate Facebook all you like, but Oculus wasn't the scrappy small-town team about to beat the reigning world champions. They were a grade school team playing against all six world champions at the same time, probably about to get their asses kicked all the way back home.
Without Facebook or a company like them, Oculus were destined to be a soon forgotten speed bump.