Multiseat Linux does wonders with limited Cpu resources, but in some cases little cpu is left for applications. Now the focus is making each Multiseat station feel like a unique console login. N concurrent user logins, using simple, Usb 2 hardware, and overhead, mean a large cpu load. Add the X desktop environment ( Gnome 3 or Gnome 3 Fallback) and the user / user interface share of cpu power can be pretty large. This all login / Gui overhead.
Classic X-windows was built to have User side hardware ( display keyboard, mouse, with minimal brains) on one end of a pipe. Applications ran on hardware without the overhead of user side stuff. An app server could spawn apps free of the lowlevel user side overhead. Its Clients would be Multiseat linux systems which handle user side issues, ( login, UI, and driving the user side hardware). Multiseat linux can replace multiple individual system units with multiseat thin client clusters. These clusters can be larger if redundant systems actually run the guts of the users applications.