You can run VMs on the Mac at near native speeds. I play some pretty unoptimized games with friends who are running Windows in a VM on their M1 Macs, and their performance is fine.
It turns out Windows developers using Docker have the same complaints that Mac users of Docker do. In fact, I know people who run Docker Desktop inside a VirtualBox Linux VM on their Macs because it's so much faster than the VM Docker spins up.
The problem isn’t that the VM itself is slow (in fact, Apple’s hypervisor is pretty good IME) but that sharing files with the Mac filesystem is slow. If you use Docker volumes the issue goes away, but that’s kind of hard unless your editor has support for cloning your code to a Docker volume (so, it’s hard unless you use VSCode).
The dev environments feature in preview for Docker Desktop[0] is supposed to make this flow easier, but if you have to do anything that doesn’t fit into the “I’m writing a web service that is easy to proxy” mindset, you’re better off doing a full VM with Linux (via Multipass or VirtualBox or whatever) and keeping your code in there if you want maximum performance.
It turns out Windows developers using Docker have the same complaints that Mac users of Docker do. In fact, I know people who run Docker Desktop inside a VirtualBox Linux VM on their Macs because it's so much faster than the VM Docker spins up.