How much Virtualization is too much?

This is one of the best explanations of virtualization I’ve read:-

“Virtualization allows us to slice up a physical server into
separate hosts, each of which can run different things. So if we want one service per host,
can’t we just slice up our physical infrastructure into smaller and smaller pieces?
Well, for some people, you can. However, slicing up the machine into ever increasing
VMs isn’t free. Think of our physical machine as a sock drawer. If we put lots of wooden
dividers into our drawer, can we store more socks or fewer? The answer is fewer: the
dividers themselves take up room too! Our drawer might be easier to deal with and
organize, and perhaps we could decide to put T-shirts in one of the spaces now rather than
just socks, but more dividers means less overall space.”

Book: Building Microservices by Sam Newman