Xcode is also required for iOS development. I haven't used Xcode in a while. Are there aspects of Xcode that are only used in iOS that are better or more modern than those that are used only for MacOS?
The UI framework for building Mac apps (AppKit) was designed in the 90s. In ~2007 it was revamped for the original iPhone as UIKit, but crucially Apple never backported their modernization to the Mac. And even UIKit is starting to look outdated compared to modern innovations such as React Native.
So I don't envy the Xcode team, they are working with an old codebase and targeting an abandoned UI framework.
I'm sure if Apple could swallow its corporate pride and just fork VSCode, they could work miracles.