Those small things are actually the ideal use case for VMs.
Imagine wanting to spin up a new server so you go and buy that small tower, bring it back, and hook it up.
Now imagine using a VM where you literally go onto a webpage and click a button to provision the same amount of resources.
Additionally, most hardware sits idle most of the time. When you're using tons of towers, it's likely that most of them will sit under 50% load 90+% of the time. With a VM setup, the hypervisor can balance that better so you can get better utilization of your hardware.
Imagine wanting to spin up a new server so you go and buy that small tower, bring it back, and hook it up.
Now imagine using a VM where you literally go onto a webpage and click a button to provision the same amount of resources.
Additionally, most hardware sits idle most of the time. When you're using tons of towers, it's likely that most of them will sit under 50% load 90+% of the time. With a VM setup, the hypervisor can balance that better so you can get better utilization of your hardware.