I love Cursor deeply but choosing to be a VSCode fork instead of a VSCode extension was a fatal choice. In the long term I think they either have to retool as an extension or they will go out of business. You can only publicly flout Microsoft's licenses for so long while making a competitor to one of their AAA products.

They are reselling an editor they did not make with a small extension that uses AI models they do not make.

I don't think they'll survive very long as it seems that they don't actually have that many things that differentiate them. And there is a lot of competition.

Apparently VSCode doesn't allow extensions to do the same amount of integration as the Cursor people want...

They wouldn’t take off if they weren’t a vscode fork. They may die a heroic death now having kickstarted the proper AI IDE. (Copilot was first and it was… nice? then it sucked so bad everyone jumped ship, remember? MS needed that kick in the balls.)

Eh, I mean it's a fork. They can keep updating their fork forever. Reality is they want complete control over the product, and VS Code doesn't expose everything in the extension API.