Rather than replacing failed hardware hosting a fragile line of business application, we performed a P2V migration (physical to virtual) for a client using a legacy product, no longer being supported by the vendor - but relied upon almost daily by our client. While this kind of virtualization project isn't the ideal, it is rather common and very practical. Sometimes there are no good alternatives - or the replacement product is far enough out and the current hardware is literally "that bad"... and virtualization is a quick, inexpensive fix.
In addition, the new virtualization platform allows for scalable, long-term, maintainable systems that can be easily moved to newer hardware down the road as part of the normal product replacement life-cycle. What we typically find is physical server hardware being inefficiently utilized and cumbersome to maintain or upgrade compared to virtualization platforms that make adding memory, CPU cores, storage a snap. Providing right-sized VM resources on top of shared storage solution (like a Nimble) opens up a whole new realm of IT possibilities (clustering, resiliency, disaster recovery, etc.).