Once use case is if you're running a multi-tenant service, where customers can deploy their own docker containers. In terms of developer usability, it's way easier to have them push containers to a registry than it is to ask them to package a custom ISO for upload into a VM. To your customers, it appears you are just running docker, but on the backend you isolate each container in a VM for OS-level security isolation.

The Intel Clear Containers project [0] is working on this.

[0] https://github.com/clearcontainers