Why was it considered good practice to host only one app per physical server?

It seems like before virtualization & cloud happened, in large companies running multiple business applications on-premise, IT departments prefered hosting one application on a dedicated server, instead of several application on one server.

What makes me say that is documentation like this

it is common practice to dedicate individual computers to a single application.

Why ? I haven't made the maths but it sound more economical to buy a big server and run multiple apps on it. There are certainly other important factors that I'm not aware of.

It's all about $$$.

When having several services on one server you have more problems to keep it secure and you will need more backups and fallback servers to keep up with the demand. This results in even more server and manpower to handle those. Also its more complicated to upgrade server with many different programs.

The cheap alternative is to use virtualization. A good example is check-root were you should have all the things needed for this service and nothing else.

There are may ways for virtualization...

• virtualization of a complete server while the guest system doesn't know its running as Hypervisor.
• virtualization of a complete server while the guest system can control the Hypervisor and vice versa.
• Container running without Hypervisor nor hardware and all processes are handled by the host system.
• Infrastructure as a Service (IaaS) like DropBox or OneDrive or OwnCloud.

TLTR With virtualization it is much less complicated to maintain services and its much cheaper.