Someone at Nvidia realized they were doing something non-evil by working on nouveau for tegra, and felt the need to restore balance.
I had completely missed this new form of insanity, which generation of cards did it start?
It has been the case almost as long as PCI passthrough was possible. At one point, higher-end Nvidia GPUs could be passed through. Note that Nvidia has invested into graphics hardware specifically for graphics virtualization, which may explain the artificial feature segmentation, http://www.nvidia.com/object/virtual-gpus.html