The sweet spot for a server is pretty large: 16-20 cores and 256-384 GB RAM. This could run one MySQL or a lot of Nginxen. I/O is a little harder since you might not want to pay for a million IOPS in every server.
There seems to be a false assumption here that OSes and hardware scale linearly, such that 16 nginx containers would run as efficiently on one physical server as they would run on 16 separate smaller servers.
Or that 10Gb Ethernet, which you'd want if you were making such a large number of services co-resident, is common among cloud providers. Open VSwitch can barely handle 1GbE with a high TCP session setup/teardown rate as it is.
