Even if Alan Kay is talking about PCs and not servers, you still need important things like the ability to connect to the Internet (TCP/IP), IPC, VMM, threading and multi-tasking, etc. I suspect I've not understood your point though, so feel free to clarify what I've missed :-)
1. http://developer.apple.com/library/mac/#documentation/FileMa...
2. https://developer.apple.com/library/mac/#documentation/perfo...
Shortly afterwards this stopped making sense because RAM got cheap. Should a 4G PC have a 16G swapfile? Should a 256G server have a 1T swapfile?
In short virtual memory was a hack to get around economical constraints. If you have the main memory, use it! Were it not baked into the OS at a deep level, I've have stopped using swap 10 years ago. It could be taken out of the next version of all the main OSs altogether, and no-one would even notice.
However, disk-backed page faults are but one component of a virtual memory subsystem. The real genius is the OS can provide access to memory uniformly in a way that is transparent to processes.
The fact that the two are entwined now is because of system defaults and decisions by OS developers on how to implement the page replacement algorithms in MM subsystems.