Earlier quoted context omitted.
Rather it's replacing systems like systemd and various other system daemons with the docker equivalents. For example why run a network supervision daemon if dockerd or equivalent handle all the important complex pieces of networking via container orchestration? Why have a local package manager, or system port mapper.
I'm pretty horrified by the argument you're making. The reason all those things are separate things is because they serve orthogonal functions. By bundling all of that into a single binary how have you improved things? You've increased the attack surface, reduced stability, increased complexity, and made things a lot harder to test and verify.
Personally I prefer running SmartOS and Triton containers. Their system seem much more stable than any of the Linux containers and/or systemd setups I've tried. It sticks a bit more to traditional unix design which makes sense to me. Items like the caching layer for containers build on ZFS snapshots, a well tested file system layer, rather than ad hoc userland tools. Triton also runs all of the orchestration layers in separate zones (containers) like RancherOS is trying to build. But each component is a simple(ish) service, it's easy to `zfs list` and check on a container's file system or fix it or backup, etc. Same with SVC or VM machine management which both have small simple tools that do one thing pretty well.
To that note, docker has been moving towards breaking out and using smaller daemons haven't they? If that continues it might turn out more modular in the end wherein RancherOS would end up being more modular than systemd Linux setups. Imho, that'd be great.