Desktop virtualization, as in running VMs on desktops, is a niche market, and not where the money is. Ingo refers to this market, where the developers are, and where perf improvements will make sense.
There's the "where the money is" development model, sure.
There's also the "this is fun to hack on and I've got an itch to scratch" development model, though. Given the history of Linux, the latter model proves itself to be pretty much crucial in getting tools to the stage where they're, well, ready for World Domination.
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