You don't have to oversell like that. It doesn't change the fundamental, unavoidable fact that containers are a far more efficient way to virtualize than hypervisors for fundamental architectural reasons. An OpenVZ-based hoster that didn't oversell ridiculously would be cheaper and faster than a hypervisor-based host.
With a hypervisor you are running an entire kernel within a simulated machine within another kernel. That will never be more efficient.