Yeah they will make great server CPUs. I have not done much with Vsphere but you may possibly want to check for compatibility with Ryzen on any hypervisor. Not sure any of them claim that Ryzen is reliable yet so something to keep in back of head
WikiChip ( dot org ) is a nice reference.
First, do not use Ryzen 5 with built in graphics or the 5-5500. These CPUs do not support ECC memory which I think a server should have. Additionally, when you virtualize, more cores are better because each virtual is assigned so many cores (1, 2, or more) and RAM and drive space. Ryzens with an “x” at the end are game/performance oriented so you pay more for those.
I recently picked up a Ryzen Pro 7-2700 which is an older Zen Plus 8 core for well under your budget on E-bay.
Additionally, the 5-5600G, 5700G do not support PCIe-4 so if your MB has PCIe-4 the CPU will dumb it down to 3. It is a huge problem when use in conjunction with the 6500XT GPU which is ok on PCIe-4 but half speed on PCIe-3. In my Grand opinion, those G CPUs are not mainstream, and stay with mainstream.
The exception is the Pro series (discontinued I believe) where even a Ryzen Pro 3-3200GE handles ECC memory and the E indicates energy efficient 35W rating. Check E-bay.