The choice to setup a dedicated instance can be a good option.The main goal is to give an application the control of the SQL Server instance and to isolate in the same time the security of the other databases.Keep in mind that a consolidated server hosts a lot of databases and applications.Several factors are involved in the definition of the target architecture like security, server collation, resources control or difference of versions.
Indeed, each application consumes a certain quantity of resources like memory, processors, network or disks.
It allows considering more robust solutions about fault tolerance, performance and scalability.
When we talk about consolidation with SQL Server, we have quickly to ask if we need to implement a standalone or multi instances.
The step is very important and should not be overlooked.
Each application has its own set of prerequisites for security.
But computing efficiency through consolidation is only one benefit of server consolidation.