You'll find that a lot of people run Workstation for a homelab type of environment. It is easy enough to do a nested ESXi solution along with vCenter, etc., so you can definitely emulate the server environment. As far as performance, it is my understanding that ESXi on bare metal will perform better (better memory optimizations, etc.) but you might not notice the differences in a home lab environment.
Now what you won't get is the touch and feel of the bare metal; if that doesn't matter (and it sounds like this will be a homelab-type setup) then you'll probably be better off with a high powered desktop vs. an older server. Power consumption will likely be lower on a new desktop as well.
As for losing the VMs, you should be able to back them up / copy them to external media (i.e. a USB hard drive) and bring them over to the new setup.
Hope that helps.