Oh, but it is. We encrypt the drive image; check this out: https://www.google.com/search?q=qcow2%20encryption. The first article (in my view) is from Daniel P. Berrange. Check the "Virtual Disks" section in his article.
using homomorphic encryption, and doing all calculations that way? Cool story bro, not gonna happen(at least not this year).
the fact is:
if men in black suits showed up, and you did not know the key, the computer would and black suit-guys would win as they are pretty smart people. This is only security by obscurity.