In those situations you specifically do want containers on VMs because Docker containers do not provide the same level of security and isolation that VMs do.
I could see vmware doing something like that -- implementing the docker api, but actually running containers on very lightweight vms, so they can leverage their existing virt infrastructure (memory ballooning, cpu allocation, migration, etc) with it.
This is the opposite of "turtles all the way down" - it's like a veritable layer cake of system isolation. It's the turducken of server systems.
However, check out hyper.sh, the project uses hypervisors to run Docker images, which completely eliminates the need of guest OS, making the whole stack immutable while just offering the hypervisor-level isolation.
In my opinion, Hyper is the way to go, instead of the minimalist guest OS distro.
You don't eliminate minimalist VM even with hyper.sh