As for host restrictions I need to use LXC too (not lxd), what I needed
to get this working was just:

lxc config as:

# Mount local kernel modules dir, snap needs it for its bind-mount
lxc.mount.entry = /lib/modules lib/modules none bind,create=dir,optional 0 0

# Mounting fuse (for snap squashfs)
lxc.mount.entry = /dev/fuse dev/fuse none bind,create=file,optional

# Mount proc and sys in rw to get udev working for snaps
lxc.mount.auto=
lxc.mount.auto=proc:rw sys:rw

Once that snapd *and* fuse packages got installed (squashfuse too?)
snaps worked as expected.

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https://bugs.launchpad.net/bugs/1628289

Title:
  snapd should depend on squashfuse (for use in containers)

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