One example where virtualization is easier in practice is where you're not in control of the network intfrastructure -- ie: you subcontract management of switches etc to someone else.

For someone the size of Etsy that wouldn't matter much -- they have an obvious need to manage the entire stack. But for smaller institutions that might not target "scaling up to serve the entire public web" -- it is a factor.

Another example is if you have heterogeneous hardware -- it is much easier to just install a hypervisor that runs on every box and then manage that via your vm-toolset, that set up many different images. It also makes it easier if you need to run different os' -- do all your os images have drivers for all your hardware?

Granted, in theory OS' should abstract away hardware -- in practice, if you need to change out a few of your mysql instances running GNU/Linux to Microsoft SQL servers for a new project/change in workload -- being able to just spin down the old vms and up the new ones helps a lot in terms of agility.

But yes, it's absolutely possible to provision physical hardware as well.