May you elaborate why virtualization provides a layer of security and isolation that containers still haven't (and maybe never will)?
2) Containers share the guest kernel. To elaborate many/most container users are already deployed on top of vms to begin with - even those in private cloud/private datacenters such as openstack will deploy on top since there is so much more existing software to manage them at scale.
3) Platforms like k8s extend the attack surface beyond one server. If you break out of a container you potentially have access to everything across the cluster (eg: many servers) vs breaking into a vm you just have the vm itself. While you might be inside a privileged network and you might get lucky by finding some db creds or something inside a conf file generally speaking you have more work ahead of you to own more hosts.
4) While there are vm escapes they are incredibly rare compared to container breakouts. Put it this way - the entire public cloud is built on virtual machines. If vm escapes were as prevalent as container escapes no one would be using AWS at all.
Some cloud providers will trust containers to isolate different customers' code running on a shared kernel, but it's not the norm. I think Heroku might be one such. There's at least one other provider too, but frustratingly I'm unable to recall the name edit found it, it was Joyent, who offer smartOS Zones. [0]