I sell slices myself; and this is something that should be clear to everyone; the reason why you'd want to buy a slice from me (or someone else) is that a 1GiB slice from me is a lot cheaper than a dedicated server with 1GiB ram.

now, some VPS providers have really cool provisioning systems that add a lot of value (I'm still working on mine... but I'm not there.) but those are not unique to virtualization. You can build really cool provisioning systems to work with hardware servers as well. The win from virtualization is that 8 cores/32GiB ram is the most economical server configuration at the moment; with virtualization you can slice that up into smaller servers for people who need less than 32GiB ram /8 cores, and save them a bunch of money.

Maybe that will change once SSDs become the default hardware. Without the bottleneck of seek time, latency should be much easier to quantify. Also, since you wouldn't be penalized for "context switching" (I know this term doesn't really apply to disk IO, but I mean switching disk jobs often, which requires a head move on HDs) you could maybe someday slice up the SSD time like a CPU and guarantee it directly. (For instance, if the SSD is capable of 200mbps, you're slice could be guaranteed 10mbps. Or something more technically realistic, I am but an amateur.)