The transitions from host -> VM is not slow, it's the fact that the packet now has to touch the VM's CPU and go through it's whole routing and natting tables ag

The transitions from host -> VM is not slow, it's the fact that the packet now has to touch the VM's CPU and go through it's whole routing and natting tables again. And then again for the container. The transition from physical host memory -> vnic is analogous to just sending the packet over a wire. That's not the slow part of modern networks.