While I agree with this technically and I have used vi(m) for years, there is something experientially quite different about being able to use a local gui with all the mouse support and ease of use of VSCode or Sublime compared to the chording of more traditional terminal editors.
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.
Remote editing on Emacs isn't a mere "technical possiblity." It's available out of the box, is no harder than working with local files, and crucially, doesn't require you to install anything on the remote host unlike VSCode.
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.
I have not found an answer on does it support dealing with containers on remote side, let's assume it does and pass this part.
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.