Plenty of large companies are using them (I'm talking Google/FB/Microsoft and the like). You may not have heard of it because they run these systems in-house vs using a commercial service.
My company switched to 100% remote dev envs a couple years ago. When you cut a branch it spins up a VM and you can connect to it from VS Code (native or browser based) or just plain SSH. It works great. The lag is not noticeable at all. Dev envs are fully provisioned and up to date with all tooling and dependencies so you don't need to bother with managing any of it locally. Given a choice I don't think any dev at my company would go back.
My company switched to 100% remote dev envs a couple years ago. When you cut a branch it spins up a VM and you can connect to it from VS Code (native or browser based) or just plain SSH. It works great. The lag is not noticeable at all. Dev envs are fully provisioned and up to date with all tooling and dependencies so you don't need to bother with managing any of it locally. Given a choice I don't think any dev at my company would go back.