This is about a completely different type of VM application, and a completely different kind of storage architecture. This is about everything being on the storage box, not just any application state. The two nodes export NFS shares, which host the root filesystems of the nodes being run on the VM servers. Most likely, the two storage heads will be existing on the same subnet as the VMWare boxes, thus making a network partition that affects both nodes much, much less likely. Additionally, by having the sort of architecture being presented, you can do things like live migrations of VMs, which is useful when the underlying OS needs to be brought down for maintenance.

There are trade-offs with any architectural decisions, and your idea provides a much more byzantine, complex, and expensive system for little to no trade-off at the scale presented. There are quite a few places where they just need a few servers, and going to your idea just makes things more expensive and more complicated.