I saw a talk a while ago that was advocating for the same thing, except this was about JS and not webassembly. I can't find it tho - I remember it being related to the WAT js talk; It also mentioned that it would eliminate rings on the cpu (and simplify cpus) and context switches which would make execution faster; they were citing some MS research on the matter - damn I really wanna find the talk now...
Edit: https://www.destroyallsoftware.com/talks/the-birth-and-death...
thanks BoppreH
MS research: "Hardware-based isolation incurs nontrivial performance costs (up to 25-33%) and complicates system implementations" (virtual memory and protection rings); I think MS knows what they're talking about here