The average Linux VM I run is around 50-100MB of RAM usage. Not actually that much more than an LXC container.
There are some use cases for a VM over a container, sometimes you want better isolation (my public facing webserver runs in one), or a different OS for some reason (I run an OSX VM because its the only way to test a site in Safari).
Containers also have some advantages for device passthrough, I have my Intel iGPU added into one for Immich and Frigate, can't do that with a VM unless you detach the whole GPU from the system.
There are some use cases for a VM over a container, sometimes you want better isolation (my public facing webserver runs in one), or a different OS for some reason (I run an OSX VM because its the only way to test a site in Safari).