The only uses I can find for this is to get prisoners or degenerates of society on Deathrow and give them a Gladiator style of death while science could study the impact of real fear and survival in a virtual world. The one who wins earns their freedom. Exploding brains are a bit too much though. More like injections wired into your system.
Or those on life sentences with an ending to it. Be given a peaceful place to live in a virtual world until a certain time. Or those who are older with Assisted Suicide could live out the rest of their days in the Virtual World living a young virile life with others until it is time to go. Meh applications can be well thought out, its at torture where one should stop.
Still super fucked though, but seeing how societies have always lusted for some sort of blood sports this is probably it without seeing it actually happen.