Virtualization is definitely another way to approach this problem but I think having a single system image as well. Ultimately the problem that virtualization most solves is the system management problems of running many different applications on the same system. Virtualization is great but I don't think we should stop trying to solve the underlying system management problem. An OS kernel which can see the whole stack, from the hardware to the applications, is going to be able to make better scheduling decisions and be higher performance then one where everything is abstracted away, even on a modern system where most of the hardware costs of virtualization have gone away. I suppose on that tangent the outlier is disk subsystems, current RAID/SAN systems abstract IO away and miss an opportunity for the best IO scheduling decisions (can't have per-disk queues and elevators when you don't see the actual spindles).
Virtualization is a means to an end, if people could get some of the same benefits running on a single system image they will do it.