They operate at different layers.

iscsi is a block device: you gain a 'disk drive' sitting on your network. A dedicated network for disk traffic and use it to host on-prem virtualization. It's called a SAN array.

I kind of expect the performance is worse, but one neat thing is that iscsi is a block device, so you could run e.g. disk crypto, volume management or whatever on it. Not to mention any FS. And you don't need to deal with NFS or RPC.

Dunno about performance vs NFS, but I've stuffed an unaware OS onto ZVOL-over-iSCSI using a NIC with option ROM.