One can use something like https://github.com/google/gvisor as a container runtime for podman or docker. It's a good hybrid between VMs and containers. The container is put into sort of VM via kvm, but it does not supply a kernel and talks to a fake one. This means that security boundary is almost as strong as VM, but mostly everything will work like in a normal container.

E.g. here's I can read host filesystem even though uname says weird things about the kernel container is running in:

  $ sudo podman run -it --runtime=/usr/bin/runsc_wrap -v /:/app debian:bookworm  /bin/bash
  root@7862d7c432b4:/# ls /app
  bin   home            lib32       mnt   run   tmp      vmlinuz.old
  boot  initrd.img      lib64       opt   sbin  usr
  dev   initrd.img.old  lost+found  proc  srv   var
  etc   lib             media       root  sys   vmlinuz
  root@7862d7c432b4:/# uname -a
  Linux 7862d7c432b4 4.4.0 #1 SMP Sun Jan 10 15:06:54 PST 2016 x86_64 GNU/Linux

Gvisor let's one have strong sandbox without resorting to WASM.

Yes, but note the difficulty of building a specialized I/O or drivers for controlling access in a virtual machine versus the WASI model.

Also, startup times are generally better w/ availability of general metering (fuel/epochs) for example. The features of Wasm versus a virtual machine are similar but there are definitely unique benefits to Wasm.

The closer comparison is probably the JVM -- but with support for many more languages (the list is growing, with upstream support commonplace).