But to your point, I don't think I ever said machines don't need a management control plane (I develop a bare metal management control plane for $DAYJOB, I'm fully aware of what it entails!) I'm saying that you don't need to insert a VM layer between the bare metal and containers: Having k8s run on the bare metal OS would be ideal IMO.
But since Oxide seems to be Illumos-based, that's basically not possible... At least not for containers as most people know them (ie. with linux-based docker images.) Heck, even if running a VM layer between the OS and the containers, it looks like running your own hypervisor prevents you from (currently) having nested virtualization, which makes certain k8s workloads a lot harder.