With Visual Studio Code, I think, MS is trying to reinvent their VS family of products. Since the current Visual Studio is strongly tied to Windows and MS has accepted the multiple operating systems future (I think, in MS roadmap, revenue from Cloud Operations is one of the major factor), it's important for them to have a developer platform which works great on all the operating systems. HTML5 and JavaScript provide this opportunity to create that development tools platform for the future.
It also leaves the possibility open to port it inside browser/cloud with a lot of code reuse. If Internet Speeds improve a lot and computing in cloud becomes a lot more cheap, I think in next 10 years, for typical web projects, developers might just prefer remote development environments, which they use for coding from an App/Browser.
It's good to see that MS didn't wait to first port .Net on major Operating Systems as part of their .Net Core initiative and then write their cross platform development environment on top of that. Instead they have taken the bet on HTML5/Electron.
They are providing the same tools they use to drive VSC to many popular editors, including Emacs and Vim as well. It seems that Microsoft wants to give you the best support they can in whatever environment you like!
What Sublime has going for it versus these other editors is ease of use and a much better looking UI. But VS Code has that too, and it's free.
FOSS has spread so much that IT is probably the only industry where people nowadays expect to sell their work using tools they got from others for free.
It is very hard to make a living from donations and books (which tend to get pirated) alone.