Having used both sshfs and vscode-remote for many years, I can assure you that vscode has a lot more features, with better integration; and even the features that sshfs does have, vscode-remote does the same thing better :)

(You can kiiiind of get the same features with sshfs + mosh + ssh + docker + a bunch of custom scripts + a suite of not-integrated command line tools... but that’s very much a “Why would anybody want to use dropbox when we already have rsync?” situation)