It's worth noting that we're finally beginning to see GPUs that support being used by the host and guest simultaneously. Intel Xe graphics supports SR-IOV, which allows partitioning GPU resources for host+guest(s), and prior to that they had iGPUs that supported something similar (GVT-g) to share resources between host and guest.
The problem is there's currently no support from Nvidia and AMD for anything of the sort outside of high-end products aimed at workstations or datacentres. Though nvidia's proprietary GRID solution can be used on some consumer-level GPUs via a clever hack that tricks the GRID driver into thinking you're using a datacentre GPU.
Still, the situation is improving slowly, so maybe we'll eventually start to see more mainstream support. Nvidia recently removed a dumb VM check from their Windows driver, making their cards more friendly for passthrough users, so there's at least some recognition of the use case.
There absolutely nothing wrong with doing 'developer' desktops as virtual machines. If there are GPU requirements products like AMD FirePro and NVIDIA GRID exist that offer GPU resources to virtual machines.
You still have the option of persistent or non-persistent workstation OS (XenDesktop/Virtual Desktops) or alternatively could deliver just the applications in a hosted-shared (XenApp/Virtual App) solution.
> I’m a developer and I’m being asked to put together a list of every tool, application, and extension all of our developers use across the org so that one single image can be built and scaled out so that we have X number of developers to a server.
You very likely would not have a single image if there are application dependencies or incompatibilities with one another.
> I know we have used Citrix for years as a way for any employee to access resources remotely, but offering up a web browser, Office, and some file shares feels far simpler than trying to built and manage a handful of servers with every developer tool used across the department as well as the need for developers to tinker with settings, install tooling, and extensions semi-regularly.
At your own admittance you don't know the full capabilities of Citrix or what their design is for what they're proposing. I don't know exactly what's been presented to you either. Hopefully your company has engaged a local partner and/or Citrix to help with design as that is key to a successful deployment.
Here's a quick highlight of the GRID product which they potentially could be using - https://www.nvidia.com/en-us/data-center/virtual-pc-apps/
Much more difficult(and costly) for the server to perform these functions than a dedicated Gaming system.
The CPU's(probably Xeon) aren't really built for dedicated gaming. Also remember that you are sharing CPU cycles with other VMs which is going to created minor overhead a la the hypervisor.
You would also, most certainly, need a dedicated GPU card for VMs such as NVIDIA's Grid system.
You could install a standard(that meets hypervisor requirements) GPU to the server chassis and then directly pass through the GPU to the VM, but that would mean you need a GPU per VDI which would require multiple hosts for the GPUs to even fit, but then because they are dedicated you'd lose the ability to load balance across hosts for those VMS because they need to stay on the host that has the dedicated hardware.