Being a noob and all I was wondering whats the real benefit of having a monolithic lets say proxmox instance with router, DNS, VPN but also home asssistant and NAS functionalitiy all in one server? I always thought dedicated devices are simpler to maintain or replace and some services are also more critical than others I guess?
“Easier” and “simpler” are in the eye of the beholder.
A different way to approach it is to limit the failure domains. If this breaks how sad are you?
I would separate storage from the rest. Networking stuff together may be fine. Home assistant depends on how dependent on it your household is.
This is the way.
There’s nothing worse than finding your DNS/DHCP has gone down and it’s a VM / container running inside a server that can’t start because it doesn’t have an IP address and you can’t resolve names to get the thing started.
Break things down into chunks that make sense - to you.
I have dedicated (low power) hardware for the interweb firewall / DHCP / core network stuff.
I have a NAS for storage with all the backups / reinstall images on (so I can rebuild the firewall if there’s no internet, for example)
Then I have everything else in a single server.
Sources: a house fire, water leak & many hardware failures & borked upgrades over many decades.