But Continue and a bunch of others literally did that.

The better question is why is there this horrible monoculture in SW startups around raising money through VCs? We need more regular businesses who build something useful and charge a fair price. Period.

Simply put, without VC funding, these services would cost hundreds of dollars per month, and nobody would pay those prices. Companies like Anthropic can offer $20 plans precisely because they have venture capital backing.

Consumers will always gravitate toward the more affordable option.

More importantly - how do you monetize a plugin?

There are lots of ecosystems where pro users pay for plugins to get extra features. See the ecommerce domain, jetbrains, even ms teams has plugins that are paid.

VSCode has some popular paid plugins like LSPs or some for git.

I dont see why it wouldnt be possible to monetize a VSCode plugin.

You.. require a subscription. These have existed long before LLM-assisted coding was a thing.