The general idea is to have hardware with direct virtualization support (which is increasingly available on commodity hardware), then have a 'control plane' of layered, virtualized syscall APIs that configure a 'data plane' of virtualization-aware hardware. Permitted I/O operations occur just as if they were on bare metal, with asymptotically zero performance overhead, because you can process an arbitrary amount of data without invoking any code at the OS/hypervisor/cloud provider layer.
For example, my rented, virtualization-aware CPU allows me to run any non-privileged code that stays within a certain block of address space; my rented, virtualization-aware NIC allows me to send and receive any ethernet frames that match certain header bits; and my rented, virtualization-aware disk allows me to read and write to a certain range of LBAs. The nth-layer OS or cloud host or whatever can come in and alter these permissions at will but it need not examine every single syscall to see if it conforms to policy.
Besides, dedicated hosting for a 1U or 2U rack machine is not expensive. If you have enough traffic that it's worth building your own TCP solution, you already have enough servers that you're spending a considerable amount of money on.