There are already a lot of BSD users. Where are the Illumos users? Are you suggesting that all BSD users go to SmartOS? I used HP-UX and AIX for many years...the one off UNIX systems just end up recreating each other due to fragmentation. They are not the way forward. The smaller mind share/usage of OpenSolaris/Illumos isn't helping. Wouldn't contribution to a BSD have strengthened the community?
Disclaimer: I work for Joyent, but I do not speak for them.
What's the advantage of running Linux->KVM->Illumos instead of Linux->KVM->Linux?
1. At a previous employer, we bought Sun compute nodes. Nice hardware, arrived with Solaris 10 preinstalled. Each time we got a new shipment I'd get them racked and see if the updater wouldn't render the system unbootable after the first run. Second reboot was always to the Debian installer.
I'm skeptical DTrace and ZFS can justify the risk to invest in a niche platform. Personally I'm holding out for the linux alternatives (btrfs, ceph) to mature.