The VS Code team just announced that you can use VS Code in the cloud now at vscode.dev. This is not the same thing as GitHub Codespaces, but it's still pretty cool and you can still do quite a bit with it. TLDR, local development with cloud tools.
With the availability of vscode.dev, we begin to finally realize our original vision of building a development tool that can run fully serverless in the browser.
You can read more about the announcement on the VS Code blog.