In what aspect is Linux is better than others? It is flexibility, according to Linus Torvalds.
I think the real strength of Linux is not in any particular area, but in the flexibility. For example, you mention virtualisation, and in some ways that’s a really excellent example, because it’s not only an example of something where Linux is a fairly strong player, but more tellingly, it’s an example where there are actually many different approaches, and there is no one-size-fits-all “One True Virtualisation” model.
Flexibility is the reason why Linux gets used in so many ways. Unfortunately, nowadays the only product feature that makes headlines is simplicity. Not that I am against it, or that flexibility and simplicity are necessarily on opposite sides, but I have seen flexibility being sacrificed under the banner of simplicity. I think the aspect of simplicity for a tool should vary by its users, e.g., end users or developers. Flexibility might involve taking decisions, which works as freedom in some cases. I always feel that developers need flexible tools to create simple tools for a wide base of end users.
Linus’ interview has some good bits about open source, and how it contributes in eliminating personal bias in Linux development.