The latest update to vsftp has, in their own words:
– Add stronger checks for the configuration error of running with a writeable
root directory inside a chroot(). This may bite people who carelessly turned
on chroot_local_user but such is life.
This kind of makes it useless for a virtual user setup. A work around has been published at https://bbs.archlinux.org/viewtopic.php?pid=1038842#p1038842 .
Essentially, if you set chroot_local_user=NO in /etc/vsftpd.conf it will solve the problem, but then you have the security issues of not having a chroot’d guest.