I want to say that prgmr.com used (uses?) something like this for out of band access to VMs for serial console access or reboots, etc [0]. It certainly can be a powerful tool to give someone limited access to infrastructure.
I swear I read about this in a blog post, but that was many years ago and I couldn't quickly find it.
[0] https://wiki.prgmr.com/mediawiki/index.php/Management_Consol...