Theoretically, one could run code in vscode.dev if an extension provides a programming language runtime. I'm not sure if there are any extensions which do this yet.
It is interesting to think about how many general-purpose VM-like abstraction layers are sitting on top of each other to run this — the operating system provides an interface which the browser uses, the browser provides an interface which vscode.dev uses, vscode.dev provides an interface which an extension implementing a programming language runtime uses, and the program uses the runtime interface.
Github Codespaces has the downside that you need to connect to a cloud computer and do all your development remotely on the cloud computer, which causes issues such as lag, the need to pay money for the service, inability to use it without an internet connection, etc. This provides the benefits (however small) of a development environment running in the browser without those downsides.
Microsoft fully understands how valuable VS Code is and they are doing everything they can to keep developers interested, which is shaping its evolution. I have yet to find another open source project that has the same community involvement as vscode (https://devboard.gitsense.com/microsoft/vscode). The closes that I have found is vercel's next.js https://devboard.gitsense.com/vercel/next.js
Full Disclosure: This is my tool
Emacs. I mention this specifically because it's clear that VS Code is heavily inspired by Emacs in all the ways that you describe.
Profession web developers might have a different experience.
But. Seventy-five percent of developers use Visual Studio Code, with most of the rest being vim, neovim, or JetBrains holdouts. All of the brainpower for extensions and tooling integration is going into Visual Studio Code, not Emacs. Soon, Emacs will simply be left behind.
75% of what developers? Hobbyists? Students? Professionals? Because last one is the only relevant metric as all editors strive towards it.
You can have the same experience today, if you feel like authoring COM in C++/WinRT for WinUI 3.0.
Quite modern. /s
It's not a walled garden like the mobile OSs work in building up tooling for one editor can transfer over to others.
However due to Electron, I feel we need to update the Emacs jokes to something more akin to Electron.