I think you’re right though - Kubernetes is a massive red herring, we should ideally be running containers/functions on as close to bare metal as possible. Fundamentally, VMs are the wrong abstraction if all your code is containerized.
Joyent’s triton is the closest thing we have to this... I really don’t know why AWS/Azure/GCP haven’t cottened onto this, it would massively reduce their COGS and improve our developer experience.