I think the issue was partly cost, partly technical (cutting from scene to scene when the background changed) and partly few ways to justify it in the script.
In terms of cost, like I said, TNG used the holodeck to
save money by using historical Earth sets/costumes/etc. that already existed as opposed to alien stuff that had to be built from scratch. TOS only got on the air because Roddenberry used the parallel-worlds idea to convince the execs that the show could be made affordable with that kind of recycling, and a holodeck-equivalent would've played right into that. So a TOS holographic simulator would actually have saved them money, or at least wouldn't have cost any more than the gangster planet or the Halloween planet or the Melkot Tombstone.
In terms of technical effects, cutting from scene to scene is one of the simplest possible special effects, and it was one that TOS did frequently in episodes like "Catspaw" and "Spectre of the Gun."
Bewitched also did it all the time. True, the FX would've been simpler than what TNG used, with more cheats to avoid opticals (for instance, hold a closeup on Kirk's face while the scene-changing sound effect is heard, then cut to reverse angle of Kirk standing in the new scene), but they would've been some of the easier, cheaper effects to achieve overall.
So that only leaves story justification. Which means it isn't something they weren't technically able to do, but something they chose not to do. The mention in the bible or wherever was just a bit of speculative worldbuilding along with the various other bits of future speculation you could find there, but ultimately nobody thought of a good story built around someone getting a holographic letter from home or doing the equivalent of watching a movie.
Let's consider: what makes holodeck stories possible isn't the images, but the artificial intelligence driving them. It's only when the stars of the show can interact with virtual people, holodeck characters that can malfunction and pose a danger, that you get a story worth telling. True, "The Practical Joker" was about a computer malfunction, but that's a story you can really only tell once without there being virtual characters involved. Now, think about the difference between the '60s and the '80s. In the '80s, we had computer games. The idea of a game where a player interacts with virtual characters was around by then. In the '60s, though, the concept of computer gaming wouldn't have been familiar to most of the audience, or to most TV writers. The proposed use for the holographic simulator discussed above was for watching video messages or movies or creating landscapes. The creators at the time probably wouldn't have considered the more interactive possibilities, and so stories built around a holodeck-equivalent wouldn't have occurred to them. So it didn't seem to be as useful an idea from their perspective in the '60s as it did when they were developing TNG two decades later.
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