Let's be honest, setting up and maintaining your dropbox clone, versus installing one executable once, are not the same kind of "easy".
> And then MS can start adding all kinds of collaboration tools built in, from pair coding to bug tracking, time tracking and so on.
But they can do that just as easily today with the vscode app. The fact that this runs in your browser does not help (or hinder) at all: As you said, offline VSCode is just a glorified browser.
> I can imagine an enterprise giving devs just this
presumably they would have to give you a laptop to access it, and any laptop that can run it in the browser can run it offline, this is 99% the same codebase.
Overall I also don't understand where this fits between offline VSCode and Codespaces. Codespaces makes sense because you don't even have to clone your code, and the compute/build happens elsewhere. Plus collaborative features can be added with no hassle because authentication is already baked in.
But this seems like it brings 0 value over offline, except skipping a 30 seconds install, once.