I guess that what you found is that VSE adheres to the old rules: it is useless to send an I/O to a disk that is busy, so VSE queues. VM can't change that.
Minidisk cache can help or hurt VSE: CP's MDC will change the IO to make it a fulltrack read. So if you work sequentially, it will help. I you work randomly the fulltrack read will probaly not help. With high I/O rates it will even hurt due to the larger data transfers. -- Kris Buelens, IBM Belgium, VM customer support