A VM can still use systemd as init rather than an entrypoint script, so if you're developing systemd units, you need a VM. There is also the issue of running your application in a container in the first place. Docker in Docker is possible, but cumbersome. Redhat has certainly made it easier with Podman, but Docker still dominates developer mindshare. It's also quite a bit easier to persist changes in a VM, so rather than rearchitecting the OS or toolchain secrets management, user-specific configuration in a VM can just be done by the user after first launch and it sticks around. Simpler to do that than providing instructions and capability to mount git credentials store and gpg trust dbs into a container, then worrying about making sure you have the same UID in the container and out of it, so you don't mess up permissions.

Containers are largely just not a great medium for interactive work, i.e. development. They're great for resident applications that use a single process run via a service account.