Containers have been used in multi-tenant systems for years in both Solaris and FreeBSD via zones and jails
However, Jails and Zones aren't a security panacea either. Especially if the untrusted user has access to both the Jail and the host system.
The use case I'm thinking about is on a multi-tenant HPC cluster. There are very few non-Linux clusters like this and all of them require strict security. I'd love to deploy docker containers for data processing, but so far it's not been possible due to security concerns (unless running through a VM first).
However, I went ahead and made it explicit that I was referring to Docker containers.
The case I mentioned was an HPC cluster. There is a ton of interest in using containers more in HPC, just for the flexibility in administration and versioning aspects. But there is a catch - you need to ensure that each user is completely isolated from the others, users can't have root access, and they can't escape from their containers. These users need to have access to both the host and the jail for practical reasons (mainly due to the way the common batch schedulers end up working and data/storage access).
Thus far, those restrictions have made it difficult to deploy Docker (or other containers) on clusters. It is possible to deploy VMs with some schedulers, but it largely hasn't caught on in many places.
But separation enforced at the hardware level is a different, unambiguously better, thing.
I am a non-fan of Docker, but this elevates it to a level of strong contention. And brings Linux along for the ride.
edit: and why is it different than a shared hypervisor? Hypervisors have exploits, too...