Do you need disk encryption for hosted VMs?

Nowadays disk encryption is a common practice with mobile personal devices, because it prevents unauthorized access to sensitive data when such a device is lost or stolen. I was also aware of the virtual machine encryption capabilities that are built into the VMware Personal Desktop products (Workstation and Fusion) although I never used them ..., but - until recently - I never thought about encrypting a VM that runs on a hosted hypervisor in a data center.

Then this happened: