> Virtual machines are treated as a security boundary despite the fact that with enough R&D they are not. Hosting minecraft servers in virtual machines is fine, but not a great idea if they’re cohosted on a machine that has billions of dollars in crypto or military secrets.

While I generally agree with the technical argument, I fail to see the threat model here. Is it that some external threat would have prior knowledge that an important target is in close proximity to a less hardened one? It doesn't seem viable to me for nation states to spend the expensive R&D to compromise hobbyist-adjacent services in a hope that they can discover more valuable data on the host hypervisor.

Once such expensive malware is deployed, there's a huge risk that all the R&D money is spent on potentially just reconnaissance.