I'm aware of that, but if we could reduce dedicated hosting to a single machine through simpler code, we can feed the information from there into a cloud system. It helps a lot if the machine can be a general purpose one, since that reduces hosting costs, maintenance overhead and risk.
Definitely -- +1 to general purpose machine and doing this on normal hardware without special NIC's. However, as soon as you dump the OS, the machine would no longer be suitable as a shared tenancy/cloud host. It might be useful for some sort of dedicated service offering (that would be a cool AWS feature and allow things like Vyatta that're tied right into the kernel and SDN), but not for general purpose cloud hosting. The hypervisor/container/OS are still needed to enforce roles, manage resources, etc.
I agree, though as bcoates indicated, cloud hosts are adapting to this demand. While bare-metal access is indeed very unlikely to happen in a shared tenancy environment, there will be at least some efforts towards lower-level access.
