That paper explicitly states the reasons for isolating app domains rather than apps. So surely it all depends on the security needs, but I agree with the authors that for a common setup app domains should work.
> The only way the container would be less secure is if you think that there are more likely to be vunerabilities in the container code than in the VM hypervisor code + the kernel used in the VM
A proper compare is about hypervisor + part of the kernel it uses versus container code + full kernel as typically containers do not isolate the hardwire drivers from the rest of the system. Given the efforts Qubes guys spent to minimize the hypervisor and the kernel part (network and storage drivers are run in untrusted VM), the container-based approaches would have significantly more kernel code and, as such, vunerabilities.