Reinventing the OS
"Could we imagine a server world in which apps ran directly under ESX and there was no guest OS at all - or is this my fevered imagination running riot?"
You'd need a mechanism whereby apps could talk to one another. If they are each in a VM, the options are limited, but I dare say you could add them to the VM product. But by the time you've done that, you've just reinvented the OS.
Welcome to cycles of reincarnation.
Yes, all this talk about hypervisors being some shiny new 21st century concept rather ignores the fact that people who wrote the first OSes about half a century ago used the term virtual machine to describe a user-level address space, even before IBM borrowed the term for their VM product.
But most programmers have *no* idea of the history of their discipline, so they are condemned to reinvent it, usually more poorly.