I don't have, "external HDDs". I have a NAS running TrueNAS, with a few arrays in it depending on the performance needed for the storage. Its primary jobs are for data processing and video editing (plus smaller arrays for backups and VM snapshots), and has multiple 10GbE network interfaces (which it can saturate) to facilitate that. It was also built to sip power when there isn't any disk activity. I have no desire for it to run VMs or containers. Its job is to just be storage.

The virtualization server is one of many things that connects to it.

There are benefits to having the storage and the virtualization servers separate, mostly that there's no single point of failure.