The point of virtualization isn't to add security. It gives you functionality you just cannot have otherwise, and the cloud enables you to scale in a way that is impossible otherwise. If there are security holes, they get patched and the market moves on. It's not just going to abandon either the cloud or virtualization.
I don't agree with that statement.
As a stand-alone physical machine is expected to be secure in its own enclave an I think it's within reason a virtual one would have the same expectations.
