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It's a handy router OS, why not?
Consumer router hardware generally under performs a lot, so running your router on better hardware solves that.
Better hardware is not a VM in Proxmox. You want quality gear with each component doing one job.
If thats what your needs are. But proxmox has nothing to do with the hardware being better.
I does though since there is the added overhead.
You want hardware that is designed for networking. Networking pulls the CPU away from other things. It might be fine if you only ran a router in Proxmox but that's about it.
Also, good wireless hardware is needed for any decent speeds. You want good antennas connected to hardware that has MU-MIMO. It is also important to pay attention to the Wireless version. (You want at least WiFi 5 if not 6)
True, modern hardware can easily route 10gbps or more though so for most of us that won't be an issue. Often OpenWRT on consumer routers struggles to route even 1gbps.
I agree on the external AP, that is needed.