Need help explaining VPS infastructure situation

I'm a fullstack web developer and having difficulties explaining a situation at work regarding VPS servers to my new technical director and was wondering if anyone has any advice.

The technical director wants to move from our current production infrastructure (which hosts about 50 websites) to the following:

1 VPS instance running some sort of VM software (Not sure if this is even possible) to create indivual VPS instances for each of our websites.

Now i know this sounds absolutly crazy but I am really struggling to explain the situation to the person and everytime I try they get really uptight and say's everything I know is basically wrong.

If someone could give me a good explaination of why this is such a bad idea in lamens terms so non technical people higher up could understand clearly the issues.

Sorry if this is posted in the wrong section as I need a technical minded person's answer ironically.

Thanks in advance.

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