What I'm I missing? AWS offers (virtual) hardware backed containers as a service, I would go so far as to say that a significant number of people are running vm backed containers.
And I've been at a few shops where EC2 is used as the poor-man's-firecracker by building containers and then running 1(ish) per VM. AWS's architecture actively encourages this because that's by far the easiest security boundary to manipulate. The moment you start thinking about two privilege levels in the same VM you're mostly on your own.
The number of people running production workloads who, knowingly or not, believe that the security boundary is not between containers but between the vms enclosing those containers is probably almost everyone.
