WASM solves a different problem to containers. Where WASM does well is in running sandboxed code efficiently, because that's where it started out. I think WASM will likely take over as the standard for shipping things like Functions-as-a-Service implementations, and other forms of plugins, where one host application/server of some kind wants to efficiently run pieces of untrusted logic.

Containers don't solve that problem. They aren't a particularly good security boundary, and they are much heavier weight, in terms of bytes and startup costs, than WASM binaries, because they are deeply integrated into the OS for networking, etc. However, when what you need to do is ship a binary with a bunch of accoutrements, dependencies, files, etc, and then run multiple processes, multiple threads, and use more of the OS primitives, containers are an ergonomic way to do that, and that suits Infrastructure-as-a-Service much more closely.