This makes me nostalgic for Trusted Solaris. Nearly identical motivations, but also allowed for runtime context switching (even within running X11 sessions) without a reboot. It combined Zones, ZFS filesystems, Crossbow network virtualization, a modified X11 server, and an auth framework to glue it all together. I don't know how widely Trusted Solaris was ever adopted, but I know that I haven't seen it in use in many…
Is anybody even vaguely relevant (ie. "non startup") using it in production? Right now it seems to be a plaything for developers.