The big deal is that vscode uses a client/server setup, where a "client" vscode instance runs on your machine and a "server" vscode instance runs on the remote one. Then they figured out how to make latency and/or network intermittencies a non-issue. The experience is basically the same as working locally, except the linter, language server, formatter, and compilation run on the server-side (and hence don't bog down my laptop in this case).
Then there are quality-of-life touches, such as vscode offering to tunnel ports whenever you launch something in the integrated terminal that listens for connections. That is: let's say I run "python3 -m http.server" in the terminal within vscode (where I'm working on a remote project). The http server is launched on the remote machine, and I get a prompt asking me if I want to setup a 8080 (laptop) -> localhost:8080 (server) tunnel.
I was an adept of Jetbrain's various IDEs (and smart completions are still better there for most languages), but vscode-remote works so well that it has won me over.
Not long ago, a friend of mine was considering a new laptop. He was happy with his pixelbook in general, but working in the "c++ with lots of number-crunching" space the pixelbook wasn't cutting it. I gave him an account to my desktop machine to let him try, and he's now a happy owner of a nice workstation for much less than what the laptops he was considering cost. Important point: my desktop uses a residential connection in Spain, and he's in the US. He had 0 issues with latency whatsoever (and I can attest the connection itself does have such problems).
So for example, instead of going through the hassle of building Visual Studio Code on Raspberry Pi, where there's no official support, you can simply use the Remote - SSH extension to develop directly on the Raspbery Pi from a Windows computer. This really shines when the Linux machine you're connecting to is headless.
The Remote - WSL extension allows the same thing but in a more direct way by connecting to a WSL installation on your Windows computer.
https://code.visualstudio.com/docs/remote/remote-overview
This feature is also why I've recently been using Visual Studio Code more and more. I think something like Emacs, once you learn it and spend a huge amount of time on, would be more performant and snappy in the end, but Visual Studio Code has too many modern features and a rather frictionless configuration and extension experience that keeps me there.
Another use case is remote ssh where I can work on a headless system with a graphical editor. I use it e.g. to work in a minimal Linux VM from my Windows desktop.
The remote docker plugin is a little fiddly to setup, but once running works pretty good.