Most applications don't.
And even if the application I work on does - then only in production. Not on my laptop. So on my laptop I will simply chose a docker image that resembles production as closesly as possible. I will not use a VM.
Only when you don't need to store data for any length of time. The point of containers is that they don't store state. You have to manage that.
And for some cases you can get away with it. But for most websites, keeping a single container up for many years isn't a great strategy. (Yes, I know there are ways around this. but they are not as simple as "docker run postgres")
You’re probably right there’s a magnitude more tiny apps but who cares. A large number of us still are interested in and need to solve for non-trivial cases.
None of these are solved by "optimize kernel-parameters to the max".