I'm very familiar with an environment that has about 120 TByte of databases - Mongo and Postgres - 100% run in containers over about 75 namespaces in GKE. Handles being restarted without issue.
I've seen it work in production for 3+ years - And I don't recall there ever being an issue with the databases being in a container - it's hard to imagine them being anywhere else.
KinD[0] is a project to do just that, although production workloads are an explicit non-goal.
Plenty of usecases are already covered by that. Also, running containers in containers is also a thing.
It's containers all the way down.