Virtualization allows us to spin up new instances and migrate traffic to them. This means we can work entirely from chef and keep things clean. This is important for our volunteers to have a complete picture of an instance and to be able to make new ones.

You can easily do that on dedicated hardware too. We run all our stuff in vm's and containers even on the office dev servers 3 meters behind my desk.

And pretty much "all" dedicated server providers these days also have cloud offerings if you need to spin up some instances quickly to handle traffic spikes etc., or for dev/testing purposes.