Are you familiar with the joys of autoconf, cmake and friends? Have you tried writing a non-trivial application that simply compiles on different flavors of Linux and Windows? Compiling on different platforms is also a non-trivial problem. Having a virtualised platform that abstracts away differences between OS makes it vastly easier to write portable applications.

For many applications running on a VM on different platforms Just Works. The idea is most definitely not over, in fact it is becoming ever more popular. Just look at the rise of abominations like Electron.