Is there any reason I shouldn't be able to add a VM to a port group that contains a vmknic? That port group doesn't show up as an option.
its by design - you cant use a portgroup with the vmk for vm-traffic. you have to create a "normal" portgroup to that virtual switch so the vm can use the uplinks for its traffic
do you have standard switches or distributed switches ?
A port group is either for VMs or for the VMkernel, not both.
So if you add a VMkernel NIC to a port group it ceases to be a port group for VMs.