Based on my testing (not published anywhere, sorry) ZFS dedup works best when you enable compression. With compression, it's only slightly slower then without dedup.
ZFS is designed to have lots of horsepower and memory thrown at it.......big servers, available CPU power, lots of ECC ram. If there's going to be an SSD allocated as a cache disk, it's probably expected to be huge and enterprisey too.....
ZFS is awesome, but some features will be disappointing unless you are dealing with adequate resources.
My best guess is that I either ruined the configuration in some way or dedup and only dedup reacted horribly to being in a virtual machine.