From the recent grpConf ( https://www.youtube.com/playlist?list=PLj6h78yzYM2On4kCcnWjl... ) it seems gRPC as a standard is also moving in this "proxyless" model - gRPC will read xDS itself.
https://nginx.org/en/docs/http/ngx_http_upstream_module.html...
https://nginx.org/en/docs/http/ngx_http_upstream_module.html...