I think it's more that there are now many large companies that now deploy VSCode as a shared, distributed editor. When I was at Google they were starting to replace their proprietary "Cider" web-based editor (for Google3) with a "CiderV" which was a modified hosted VSCode. A hosted VSCode instance makes a lot of sense for a company like Google where source-code-on-laptops is generally forbidden and developers are often issued Chromebooks etc. It solves & improves the distributed/remote development problem without requiring organizational changes. And it's much faster and smoother than RDP, etc.

So those are potential customers that JetBrains was/is losing. My brain is almost 20-years-wired for JetBrains products. I would have been much happier to be able to use a remote JetBrains IDE vs a remote VSCode.

There are also people for whom the existing JetBrains IDEs will always feel big slow and bloated. They have a lot of features packed in and come with a lot of lifestyle assumptions. I can see the value in JetBrains rolling out something that feels lighter-weight.