This is what VMs are for. If you really really absolutely must run one piece of ancient software, it doesn't need to hold back everything else you do.
For a large organisation IT/TS cost is a problem with that solution. As well as managing everything else about their user's machines they'd have an extra app/service to maintain (whichever VM solution they go for) and an extra OS (XP in the VM) to somehow keep up-to-date for each user. Not insurmountable by any means, but far from zero hassle/cost.
Once an ancient version of IE is out of support, assuming that is the app you are running in a VM in this case, you also have an extra complication: making sure the VMs can only talk to your intranet sites that require it, as you don't want your users browsing more public hosts with a potentially insecure UA. Again not rocket science, just some routing/firewall tweaks, but something that has to be added to the support cost of your environments.
Depending on the licensing deal the company has with MS (or relevant distributor) there might also be extra cost involved in providing a second OS instance to all your users.
Doesn't matter that much if it's on a private network.
> Also, you double your licensing costs.
Not if the OS and virtualization solution require no license.