I'm not knocking Emacs or Vim, they are powerful tools but to be able to show a typical first year student how to edit their code remotely using SSH/Container support in VSCode is comparatively dead simple. All the students I work with now use this strategy, much in the same way they prefer to use jupyter and pandas when they can.
TRAMP has been a thing for a very long time: https://www.gnu.org/software/tramp/
and Olympic champion can jump for 5 meters, but bridges over creeks is nothing uncommon for masses.
and Emacs has been able to edit files transparently on remote hosts ...
Probably Emacs can learn [if they care to be dominating on the market] on technical possibility vs being simple and handy.
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And if we take VSCode Tunnel, things become even brighter for VScode for remote editing.
Furthermore, Emacs still has the best tooling for remote development. They're worth using even if you use other software for text editing, like I do. Dired, the file viewer, makes working with both local and remote files easy and seamless. Org mode, which can be used like Jupyter notebooks, can run code blocks remotely using any language, and can even pass data between them.
It's nice if software professionals were more open towards software that they're unfamiliar with. Software can be useful even if it takes some effort to learn. Not every feature of some software is worthless just because it isn't a clone of a more popular alternative.
One day I was not familiar with VSCode and I became familiar and many others as well. Just not Emacs. Assuming you are right and technically Emacs has all bells and whistles, it must be something else that not promoting it for being wide used.
And you skipped the part about VScode tunnels all along.