Consider, for example that the dominant costs are things like demultiplexing and security checks. If you choose to implement multiplexing with virtual network cards then you get true 0-copy multiplexing, which is much faster than the software equivalent. And many of the security checks can be eliminated by using some combination of packet filters and logical disks. (The security BTW seems to be one big difference from RDMA, which might be an alternative, but I'm not really an expert.)
Some things can't be sourced to the hardware, like naming and access control. But that's fine.
(NB, I'm not arguing for this paper's position necessarily, I just thought it was interesting, and the motivation was good enough to start me thinking about how I might get around the kernel.)