This is a technologically insane idea. There is no benefit to this over a good sandbox. Heck, traditional VMs are worse in many aspects for desktop applications

This is a technologically insane idea. There is no benefit to this over a good sandbox. Heck, traditional VMs are worse in many aspects for desktop applications (like of native integration with desktop windowing, 3d acceleration is extremely tricky, memory overhead and lack of easy ways to apply backpressure, audio latency, ...). In addition, both technologies you mentioned are either non-Free (VMWare) or partially non-Free (Vurtualbox's PUEL). There is, as far as I know, no existing VM system that is truly cross-platform that would work here.