Brute force is a pretty expensive way to get more I/O. Coincidentally the other day I measured 50,737 mixed random IOPS under KVM and 104,518 IOPS under Docker using the same hardware. Could I have bought even more SSD to improve performance under KVM? Maybe, but at what cost.
Rackspace is definitely disrupting themselves with their cloud product and today we can see that they're not doing it half way.
Checking IOPS of a fully-virtualized system (even with virtio, and it's unclear from your post whether you were using it or not) is not at all a relative comparison to something which is literally a process on the host system.
Rackspace is definitely disrupting themselves with their cloud product and today we can see that they're not doing it half way.