To be honest, as long as VS Code is free-as-in-beer, has a plugin-in system that's flexible enough for the community to go nuts with, and can adequately serve as the primary development environment for an ASP.NET app... then I'm delighted.
However, perceptions mean a lot, and in the long-run I just don't see it getting uptake from the Python/Ruby/Node.js crowd without being open source. More of a marketing issue than anything else (although there's also the concern that MS could abandon it someday).