That's crazy. Do modern cores not also use local, integrated power regulation? I think I remember an Intel PR release about that, but I don't know the detail.
IIRC, the only part they replaced was the controller IC itself. All of the main power components (switching transistors, filter inductors and capacitors) remained off-chip.
Consider that the VRM's have as much or more silicon in them than in the host processor, and they have completely different breakdown voltage and switching speed requirements relative to a CPU.