I don't think VSCode is ahead of Emacs on some objective scale. I tried to re-create my Emacs configuration with it and found it impossible. Also VSC appeared to be notably slower when tuned closer to my needs. At the end of the day there are always users who delighted by innumerable choices of configuration possibilities, and those who believe it's unnecessary cognitive load. Emacs being DIY kit appeals to the former, while VSC is built like a browser with rich plugin system, it's in between but closer to the latter. I'm sure VSC does and will have larger audience, but only better Emacs can unseat Emacs on its side of the spectrum.

Btw the effects of MS funding can be overvalued - e.g. MsTeams is among the worst IMs in the existence.