Is it really a pendulum, or is it more that this was always an idea with merit that's now finally seeing wider adoption because it's become more widely available? (In part, I understand, due to some IBM patents that expire 10 or so years ago)
The greatest trick the devil ever pulled is convincing people that shared hosting is preferable to dedicated, and then charging them way more money for it.
https://en.wikipedia.org/wiki/VM_(operating_system)
Notably, the VM operating system could run an instance of itself in one of its own virtual machines.