Well the core is surely open source as part of regular vscode. And the hosting magic other groups are doing on their own (gitpod.io ...right?).

I think assuming VS Code means open source is not right. The core of VS Code is open source but most fancy things (remote/ssh/docker usage, browser usage, code spaces like behavior, etc) are regular Microsoft products. Microsoft VS Code team still competes with itself (VisualStudio), the traditional competition (JetBrains, Eclipse) and third VS Code derivates (gitpod.io etc). We cannot assume that they give us the greatest and latest for free when they would cut themselves with that.