The big problem with Katacontainers is not whether or not they are slightly faster or slower than containers, but the fixed memory allocation which means you must first know and then allocate the maximum amount of memory they might ever need up front. This can practically limit the number of Katacontainers you can run to something much smaller than is possible with ordinary containers, since RAM is the constrained resource on most servers.
Nevertheless, with confidential computing coming along, it's likely that at some point in the future many containers will really be VMs, since current CPUs implement confidential computing on top of existing VM primitives (and that's basically necessary due to the way the guest RAM is encrypted). It's likely that any workload that touches PII, finance, health, etc will be required to use confidential computing.