It is of course more expensive but that allows them to offer the latest and greatest to their employees without needing all the IT staff to manage a physical installation.
Then your actual physical computer is just a dumb terminal.
In which movie ? "Microsoft fried movie" ? Cloud sucks big time. Not all engineers are web developers.
I've also seen it elsewhere in the same industry. I've seen AWS workspaces, custom setups with licensed proprietary or open-source tech, fully dedicated instances or kubernetes pods.. All managed in a variety of ways but the idea remains the same: you log into a remote machine to do all of your work, and can't do anything without a reliable low-latency connection.
The desktop latency has gotten way better over the years and the VMs have enough network bandwidth to do builds on a shared network drive. I've also found it easier to request hardware upgrades for VDIs if I need more vCPUs or memory, and some places let you dispatch jobs to more powerful hosts without loading up your machine.
Then realistically in any company you'll need to interact with services and data in one specific location, so maybe it's better to be colocated there instead.