Ever heard of Boot Camp? Admittedly, it was on Intel CPUs,
That's a big 'Admittedly': It wasn't just on Intel CPUs, it was on a platform that was just a firmware patch away from being a PC compatible, that used generic or third-party Windows drivers for GPU, networking, disc controllers, sound, I/O... Even the EFI firmware was a close relative of the up-and-coming replacement for the PC BIOS, which doubtless helped make the BIOS emulation firmware module feasible (which was worked out by hackers prior to Apple announcing bootcamp). It was a very low-hanging bit of fruit - a large part of BootCamp is point-and-drool assistants for disc partitioning, tweaking the Windows installer, downloading the correct drivers etc. which could be done manually or with open source tools if you were a masochist.
Later on, some of those drivers would have to be replaced to work with T1/T2, but key things like graphics still used existing Windows drivers. Running Windows or Linux native on the M1 would require bespoke drivers for pretty much everything - which in turn would require Apple to publish
stable low-level information on Apple Silicon hardware - as it is, they can change their internal specs with every new Mac, which will always come with the appropriate MacOS drivers.
Running in a virtual machine is much easier since most drivers can just be "stubs" which call the hypervisor, which in turn calls the official interfaces to MacOS drivers.
At the moment, MS don't even
sell a generic, standalone Windows-for-ARM license - you can use the "insiders preview" and MS won't ask too much about whether your license is valid, but if it breaks you get to keep both pieces. Even with virtualisation, I think it is more likely that Parallels or VMWare will sign up with Microsoft to distribute Windows 11 bundled with their hypervisors.
That could be in the future.
Well, no, it was in the past, and back in the days when the iPhone was a rumour, Android was shaping up to be a BlackBerry knockoff, and when most Mac users' prior experience with "virtual machines" was through full-software-emulation like SoftWindows, which sucked. Boot Camp made sense to Apple in 2006 - just as switching Macs from PPC to Intel processors made sense back then.
Windows is still important, but the rise of mobile and browser-based apps after 2007 ended its days of being the only game in town. One big change is the death of Internet Explorer (ding dong!) so the days of Windows-only
websites and webapps are coming to an end. Macs have also picked up in popularity and there's better support and a better choice of MacOS native software. Widespread fast broadband and improved software makes using remote desktop to connect to a work Windows PC a realistic possibility. For apps aimed at
consumers the words "Available for Windows PCs" are increasingly being replaced by "Available for iOS and Android".
That doesn't mean that Windows isn't vital for
some people, but from the point of view of Apple the number of customers for whom that is an issue is dwindling, and maintaining Windows support is a drag that they can live without. Come 2021, tighter integration with iOS and the ability to run iPhone apps is more important to Apple's customer base than running Windows.
...meanwhile, Apple and Parallels seem to have done everything they can to make Windows-on-ARM virtualisation possible and it's over to MS to allow licensing (which now probably ain't gonna happen until Windows 11 is publicly launched or
maybe until all the lingering ARM32 code has been stripped from Windows). Again, while it sucks if you want to run AAA games or demanding pro media production apps on Windows, virtualisation is the more practical solution for most people who just have 1-2 awkward Windows apps preventing them from going all-MacOS.