Eh, it does until it doesn't. Sooner or later you run into pitfalls around the leaky abstraction of pretending your state is truly idempotent and path-independent. E.g. spinning up a new instance works fine, but the existing instances that need to uninstall a previous version to upgrade to the newer one end up breaking. Or vice-versa, existing servers work fine but then when you need to launch a new one your realize the config no longer works on a clean install and you hadn't noticed it for weeks.

Container-based systems certainly have their own problems, but it is really nice having a model where you don't allow long-lived implicit state and cruft to accumulate on your application servers in the same way.