Containerization solves 99% of those problems and more, such as not having to worry about conflicting dependencies, share of common resources, etc.

I would say shared hosting is now more popular than ever, with a twist: similar to the shift that has happened from multi-user mainframes to personal computers to ubiquitous computing (ie individuals having multiple computers), self-hosters are also now hosting not one but many websites/apps per server.

I am not sure how the status quo is different from your suggestion, or rather, how your suggestion is an improvement over that?