A lot. Not that they have to do it alone, because a lot of the work on VS Code features is done by other people with their own motives (some volunteer community types, but also each of the major cloud platform vendors is investing in VSCode integration into their systems, too, and the same is true for lots of other firms.)
> Its lack of revenue model limits them
If they are imminently going to be selling a hosted editing environment built around it (Github Codespaces), does it really lack a revenue model?
> a free IDE that competes with their own revenue generating VS product
Even with VS, they've long focussed on subscription services not software licenses as the main revenue source. “Visual Studio” subscriptions (formerly MSDN) are the big push, and most of what comes with that isn't the IDE.
And VSCode is very well integrated with lots of the services they are selling.
> VSCode is going to be stuck focusing on the JavaScript/web stack for a long time and won't receive a lot of funding to grow out of that.
It's not stuck there now, and right now MS’s biggest push in terms of domains seems to be ML/AI. I think VSCode is poised to do quite well for— in fact, has largely already won much of—everything that isn't enterprise Java, where, yeah, there’s a lot of time and money on the alternatives and not a lot of MS resources devoted to competing.
GitHub Codespaces isn't a revenue model for the IDE. It is a separate product that requires a separate team, so it'd have to be charging a lot of money indeed and get a lot of users to fund two products for the price of one. It also looks like a rather basic featureset - if it takes off as a product it is not very hard to integrate into its competitors or build a similar system.
On the other hand Jetbrains is a lot more diversified now than before (when their main products were IntelliJ, ReSharper, and teamcity)
The key to JetBrains' success is not any particular software architecture, although having language analysis plugins run in-process with direct access to AST structures is an obvious advantage, it's that they're a company that charges money for their tools, which has kept their cost overheads low (very low relative to never-profitable SV startups that snort VC capital like party hounds), and which are building on an already very productive platform to begin with (Java).
This combination means their feature throughput is very high but more importantly, sustainably high. They've been doing this for 20 years and aren't about to hit a tech debt wall where they suddenly need to rewrite their product from scratch.
Contrast this to their primary competitors, Microsoft and Apple.
Visual Studio has a comparable feature set to JB IDEs. But it's Windows only, totally un-portable, hardly supports web dev outside of the .NET stack, and the plugin model is native. They badly struggled with the transition to 64 bit because of this, which in turn meant users regularly hit its internal architectural limitations like project size limits (cuz of the 32 bit address space). VS doesn't scale well because there's no good way to stop plugin crashes taking out the whole IDE. Even though MS have been pushing .NET for 20 years, VS itself doesn't use it. IntelliJ built on Java which hurt them in the early days, but now Java's perf issues are mostly solved and they benefit every day from portable plugins, a seamless 64 bit transition, cross-platform portability, etc.
XCode is under-funded, has very few plugins and can't compete for any task outside of Apple's own ecosystem. It doesn't even try, really.
VSCode is a text editor with plugins. It is at least trying to compete with JB, but I don't forsee much success in the short term, especially if JetBrains pull their finger out on light mode. It at least uses managed languages. But the most mature JB plugins have been developed over a period of decades by now. The feature-set is overwhelmingly huge, and they have hundreds of employees that do nothing else but add them. How much money is MS willing to throw into the VS Code project? Its lack of revenue model limits them, even with a sugar daddy funding them. It's unlikely they can scale to JB size because a free IDE that competes with their own revenue generating VS product is simply not something they will tolerate long term. VSCode is going to be stuck focusing on the JavaScript/web stack for a long time and won't receive a lot of funding to grow out of that.