OP here. The Kubernetes community has been fantastic at evolving the platform, and we've greatly enjoyed being in the middle of it. Indeed, many of the things we had to build next to Kubernetes have now become part of k8s itself.

Still, some of the core challenges remain: - the flexibility Kubernetes affords makes it hard to build and distribute a product with such specific requirements across the broad swath of differently set up Kubernetes installations. Managed Kubernetes services help, but come with their own restrictions (e.g. Kernel versions on GKE). - state handling and storage remains unsolved. PVCs are not reliable enough, subject to a lot of variance (see point above), and depending on the backing storage have vastly different behaviour. Local disks (which we use to this day), make workspace startup and backup expensive from a resource perspective and hard to predict timing wise. - user namespaces have come a long way in Kubernetes, but by themselves are not enough. /proc is still masked, FUSE is still not usable. - startup times, specifically container pulls and backup restoration, are hard to optimize because they depend on a lot of factors outside of our control (image homogeneity, cluster configuration)

Fundamentally, Kubernetes simply isn't the right choice here. It's possible to make it work, but at some point the ROI of running on Kubernetes simply isn't there.