Here's a funny story. DotCloud's early prototypes were in fact very similar to Cloud Foundry's "paas-in-a-box" project. We even open-sourced large chunks of it.
We eventually had to drop that design because, beyond a certain scale, it gets in the way of the user experience - in a major way. I think all major PaaS providers will agree with me.
You have to chose your priorities. Ours is to make developer's lives easier. We axe everything else.
Who's your customer, the guy using your service, or the guy installing your appliance?
Think of the difference between Google.com and the Google search appliance. One profoundly changed how people interact with the Internet. The other is an extra feature which came years later. What would the World look like today if Sergei and Larry had started with the search appliance?
I don't think that's a choice VMware needs to make, they're not a cash-strapped startup anymore.
Their customers are both developers and admins, and they seem to be able to focus on both so far IMO.
The developer highly benefits from a good (and not to mention free) admin experience anyhow, it allows for private development systems, scale/attack experiments, more portability, etc.