> why do people continue to do their work in one? Most nb users don't use vscode. I'd say main reason is you can't open a notebook without starting a kernel which takes >1 second. It also is harder to setup.

In terms of a flat file formats, there is actually a mark down extension which I would say is better than vscode's format because it is more standardised:

https://myst-nb.readthedocs.io/en/latest/