You should be using them depending on your needs. There’s a difference between app containers (single app per container), system containers (multiple apps in the same container) and VMs (OS + whatever, virtualized rather than containerized).

You probably need app containers most of the time so docker or podman is a good fit. But sometimes you might feel more confortable with another level of abstraction. Tools like Proxmox or Incus make it easy to manage “system”-level abstractions like system containers (with LXC) or VMs (with KVM) and give you a unified management approach.

You don’t have to give up app containers either. You can run docker or podman inside an LXC system container and have the best of both worlds.

Deciding when to take advantage of the system abstraction is the hard part. A simple rule of thumb is to do it when you’d like to manage the “machine” that holds the stack in a way that’s different from the host. Maybe you want to run a different Linux distro; maybe it’s the same distro as the host but you want to organize it differently; maybe you need to run a non-Linux OS.