Obviously Linux has it's place, it's just not a major OS in terms of 'normal' people, I'd bet that most users of Android don't know it's based off linux, same as OSX is based of unix. Linux has about 2% of the desktop pc marketshare (wikipedia so might be off some)..... and you say ubuntu is the second most popular of that meaning at most it has 1% of the marketshare, even vista has higher than that and that was hated as much or more than windows 8 was. As much as linux is great for servers in terms of desktop usage (which is my reference considering we're on about 'desktop' windows not the server version) it doesn't have the reach of OSX and Windows, it's that simple.
As to VM, can't see any reason why not, win 8 was fine doing that and I would expect them to maybe even offer that, they offer vm's for 'web browser testing' after all.
Going back to Windows 10....
Been reading a bit more and I'm actually curious about how the 'last major version of windows' is going to work... if they go subscription based they are going to get a lot of people going sod it and sticking with what they have, I'm not going to pay for updates/fixes/patches to an OS that I've paid for, it will be xp/win 7 all over again.
Don't worry the EU will likely pick up on it and send MS a big fine Like you I don't mind cloud integration and as daft as it sounds I kind of trust MS more than Google/Apple with my data although I wouldn't put 'private' stuff on there. In my opinion they will need to separate cloud and user somehow due to business users.