At that point, GH codespaces is a convenience tool, icing on the cake for when you want to make a quick edit during PR review, or when you're away from your desk. I saw devs use it that way (and did so myself) with no resistance.
But I have big caveats to my experience:
1) my only teams since this whole toolchain came into existence were joint microsoft/customer "build with" teams, so they were more positively predisposed to MS tooling than average.
2) I've never seen a team that uses web based codespaces EXCLUSIVELY.
Even though I know the difference between vscode-in-electron-with-remote and vscode-in-browser-with-auto-provisioned-remote is academic (and performance is probably better in the browser!)... I would still struggle with how ephemeral web apps feel to me on a gut level. Plus, as an old person I am uncomfortable when my toolchain isn't 100% local. I have nothing against the children with their cloud-powered toolchains, but it's hard for me.
<Principal Skinner on the playground, the children who are wrong>