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When I was first playing with NC I was using a RPi3 with an external SSD for a drive. Performance was pretty good, but as soon as I tried the same setup in a VM, the performance tanked. The only way I found to avoid the performance penalty was a manual install like it was bare metal, which I didn't really want to do. My experience with such setups is that they tend to be brittle.
My understanding was that the performance penalty was caused by the chain of VMs. Proxmox --> Ubuntu VM --> Docker. I don't know enough about it to say for sure.
Yah, I don't think a Pi3 is the place to make many determinations on the efficacy of VMs vs bare metal.