The truth here is more boring. Both full-fat virtualization (KVM), and containers (LXC) are the future, and which you use will depend on what you want to do. You’ll probably use both. You’re probably using both now, but you don’t know it.
The first thing to say is that full virt and containers are used for different things, although there is a little bit of overlap. Containers are only useful when the kernel of all your VMs is identical. That means you can run 1000 copies of Fedora 18 as containers, probably not something you could do with full virt, but you can’t run Windows or FreeBSD or possibly not even Debian in one of those containers. Nor can your users install their own kernels.
The second important point is that containers in Linux are not secure at all. It’s moderately easy to escape from a container and take control of the host or other containers. I also doubt they’ll ever be secure because any local kernel exploit in the enormous syscall API is a host exploit when you’re using containers. This is in contrast with full virt on Fedora and RHEL where the qemu process is protected by multiple layers: process isolation, Unix permissions, SELinux, seccomp, and, yes, a container.
So containers are useless? Not at all. If you need to run lots and lots of VMs and you don’t care about multiple kernels or security, containers are just about the only game in town (although it turns out that KVM is no slouch these days).