Cloud providers already offer full blades, though they're quite expensive. I could imagine vendors commissioning custom hardware that electrically isolates CPU

Cloud providers already offer full blades, though they're quite expensive. I could imagine vendors commissioning custom hardware that electrically isolates CPU cores and caches, like a sort of hyper MMU. The challenge lies in combining these "nodelets" together dynamically to make larger VM skus when needed without compromising security when they're supposed to be isolated. Plus you'd have to design a ton of new hardware which isn't cheap. Clouds will probably stick with traditional server blades until transient attacks are found which simply can't be defeated, even with new silicon. Even replacing entire DCs worth of blades would be cheaper than reworking the fundamental hardware. (I have no inside knowledge, my opinions are my own.)