Are there any benefits of running Proxmox and virtualizing everything, vs having a host OS and running Docker and libvirt to host VMs for services that need it? I know that Proxmox does some storage management etc, but it seems like I could get everything it does with a well-managed host OS + ZFS/btrfs and using virtualization tools
Proxmox simplifies storage, media, resource sharing, ZFS, Clustering, and Management.
It supports modern storage protocols so offloading your storage to a NAS is super easy.
I would say the biggest advantages are software package version control, stability, platform support, and compatibility. It makes VM management super simple without needing to be an expert in getting the entire KVM stack working properly.