So while you can have single-system-images on a relatively large multinode setup I doubt many people are doing that (at the place I know, no LPARs have TB of memory...). Also in the given price-range you easily can get SSI-images for Linux too: https://www.servethehome.com/inventec-96-dimm-cxl-expansion-...
If you don't need the single-system-images, VMWARE and Xen advertise literally the same features on a blade chassis minus redundant hardware per blade, which is not really necessary when you just migrate the whole VM...
Also if you define the whole chassis as having 120% capacity, running it at 100% capacity becomes trivial too. And this is exactly what IBM is doing keeping around spare CPUs and memory in all setups spec'ed correctly: https://en.wikipedia.org/wiki/Redundant_array_of_independent...
You are right though that the hardware was and is pretty cool and that kind of building for reliability has largely died out. Also up until ARM/Epyc arrived maximum capacity was over-average, but that is gone too. Together with the market-segment likely not buying for performance I doubt many people today are running workloads which "require" a mainframe...