Hyper-V was indeed designed to work presumably on servers. But the story does not end there.
Let me continue the story.
Windows Phone 8 came out in 2012. It was the version that signified the shift from Silverlight-based runtime to so called WinRT.
How on Earth Virtual PC could be related to Windows Phone? Here is the thing.
Windows Phone Emulator required a working Hyper-V setup. Say, you had no real Windows Phone device, but wanted to take a look at this new shiny thing. Run an emulator!
But wait. Emulator was based on Hyper-V, and Hyper-V required a CPU with SLAT feature. To give you a context, if you had an Intel Core i3 CPU, you were out of luck. You could not run the Windows Phone emulator! The same applied to a lot of other widespread CPU models. I guess only 8% of developers world-wide were lucky enough to have a CPU with a SLAT at that time.
So Microsoft ended in an intricate situation when Hyper-V was originally designed for server use only, but ended up as a critical dependency for an important desktop component (Windows Phone Emulator).
I guess you know where that headed. Just a few developers could take a grasp on Windows Phone Emulator, while the majority of them were out of luck. This factor undermined Windows Phone development. It was essentially a time bomb that led to Windows Phone app starvation in upcoming years, among other factors.
Combined with a Moore law slowdown, SLAT requirement turned out to be a weapon of mass destruction for Windows Phone. People who bought Core i3 in 2012 usually didn't bother to upgrade. So Windows Phone Emulator was much of a dead horse from the start.
--------------------------------------------------
Regarding those fancy CPU features for virtualization assistance. One may think that SLAT was an absolute requirement for Hyper-V, but here is a funny point of anecdata.
In order to workaround that nasty SLAT requirement, some developers resorted to the following scheme on CPUs that din't support SLAT: they installed VMware, installed a guest Windows OS. Then, they enabled nested virtualization in VMware machine settings. Then, they were able to set up Hyper-V in guest OS.
Imagine that, VMware actually emulated SLAT guest CPU on SLAT-less host CPU.
And only then, after all those hoops and wiggles those poor souls were able to run Windows Phone Emulator. What an experience.
Interestingly enough, Windows Phone Emulator was pretty snappy in that double virtualization setup. But the whole experience was ruined.
In a hindsight, that was a writing on the wall for Windows Phone.