an absence of evidence does not imply evidence of absence.
Nice appeal to ignorance there.
You mean a VM where each process looks like it has the processor/memory to itself (AKA x86 protected mode)? We already have VM sandboxes. They're called a PROCESS. Taking this concept to an absurd level of regression (full os virtualization) and then coming up with some convoluted way to let all the parts communicate again (necessary if you want it to do anything useful) adds absolutely nothing to the security aspect other than a high degree of obfuscation.
You guys and your delusional layer cake security schemes. Things do not run on the machine like that. You can add all the boxes and layers to your diagrams all you want; but, in reality it's all flat where the only difference between all your security contexts are some integer values in memory.
If the facts don't fit the theory, change the facts. -- Albert Einstein