Have you taken a look at podman / buildah? My understanding is that podman resolves all of the security concerns you highlight above while mostly maintaining compatability with the docker cli and existing docker images. It gets rid of the docker daemon so your containers (and restart policy) can just be managed by your existing service manager.
I only just recently discovered podman and I've been pretty excited. Having never used LXD and only understanding the high level differences between the two, I'm curious how it compares with regards to security and usability.
I'm a little bit too familiar with podman. LXD is more mature and actually implements all of the hardening features I mentioned. podman could implement them in theory, but doesn't. Its default security posture is very similar (though not the same as) Docker. Don't get me wrong, I do want to see podman succeed -- but I don't like the amount of unneeded hype around it. It's effectively a Docker rewrite by Red Hat (and other folks) that has some fairly important improvements, but it's not a revolutionary new concept. As for buildah, I am too biased to respond to that question.
Oh, and most of the Docker CVEs found in recent years -- including those I've found -- have also impacted podman. The most brazen example is that podman was vulnerable to a trivial symlink attack that I fixed in Docker 5 years ago[1,2]. It turns out that both Docker and podman were vulnerable to a more complicated attack, but the fact that podman didn't do any special handling of symlinks is just odd.
I have to admit, the biggest selling point to me for podman is the removal of the central docker daemon. For my use case (personal workstation and home lab), it seems strange to me that I need essentially another service manager for these processes just because I want to slap them in a container. It definitely makes sense that there would still be some gaps though as it's a less mature product.
You've definitely convinced me to take a good look at LXC/LXD though. Thanks for the thorough response!
It should be noted that (unlike Docker), LXD can be safely killed and upgraded without your containers dying -- which is the main problem most people have with Docker's container liveliness model (even with Docker's --live-restore there are many issues). The main reason why LXD has a daemon is that it supports lots of management features (such as live migration and clustering) which cannot easily be done without a daemon.
You can use LXC directly if you want to avoid a long-running daemon.
I only just recently discovered podman and I've been pretty excited. Having never used LXD and only understanding the high level differences between the two, I'm curious how it compares with regards to security and usability.