They've used monaco[1] which is the editor part of VS Code for their project but Theia apparently is easier to work on a cloud and customize.
Eclipse is also open source and has been ripped off and repackaged into dozens if not hundreds of specialized IDE's. That's what open source is about.
Looks good to me, Cloud9 was rather limited and I missed my VSCode extensions.
Edit: they have their own extension registry, which makes the whole enterprise seem a bit sub-optimal.
I think what they want to focus on is not the editor itself but rather everything around it and where it's run. In typical startups, you try to focus on your core product, so reusing the editor from another project makes sense, as they don't mind the details about the editor itself.