For example, if I'm running 5 VM's, there is a good chance that many of the pages are identical. Not only do I want those pages to be deduplicated, but I want them to be zero-copy (ie. not deduplicated after-the-fact by some daemon).
To do that, the guest block cache needs to be integrated with the host block-cache, so that whenever some guest application tries to map data from disk, the host notices that another virtual machine has already caused this data to be loaded, so we can just map the same page of already loaded data into the VM that is asking.
An OS isn't large. Your spotify/slack/browser instance is of comparable size. Says more about browser based apps but still.
A fairly recent Windows 11 Pro image is ~26GB unpacked and 141k dirents. After finishing OOBE it's already running like >100 processes, >1000 threads, and >100k handles. My Chrome install is ~600MB and 115 dirents. (Not including UserData.) It runs ~1 process per tab. Comparable in scope and complexity? That's debatable, but I tend to agree that modern browsers are pretty similar in scope to what an OS should be. (The other day my "web browser" flashed the firmware on the microcontroller for my keyboard.)
They're not even close to "being comparable in size," although I guess that says more about Windows.