My dream workspace is a real browser (with all dev tools), with integrated terminal emulator and integrated editor. Editor plugins could be prototyped with web technology and debugged on the fly (like Obsidian plugins). Is there anything like this?
As far as I understand, VSCode browser can't install browser extensions and doesn't even have Dev Tools. For example, IntelliJ IDEs ship with CEF-based browser that has Chromium Dev Tools, but it still doesn't support browser extensions.
I was being a little tongue in cheek, and my "basically" was doing a lot of heavy lifting. VSCode is electron based, so under the hood it's already doing the heavy lifting. It's got a first class editor, first class terminal, first class plugins developed using web tech, very easily and readily debuggable.
It has a browser built in, which is "just" an iframe, and it definitely doesn't function as a full blown web browser, but it does work for previewing your dev work, and given it's a dev tool it makes sense that the experience would be editor+debugger+tools first, with browser as a second class citizen (rather than chrome with an embedded terminal which would be the other way around).