You're asking for VS Code to be a completely different product. VS Code is a GUI text editor like Sublime and Atom. There's no reason for it to run in a terminal. Vim and Emacs are classical CLI based text editors. Are you asking for an alternative to those?
Yes, they're both text editors, but they're completely different classes of text editors. MS Word is also a text editor, but it would be ridiculous to fault it for not having a CLI. It's nice that Emacs and Vim have GUI modes, but I doubt they're the primary way users use those editors. Emacs/Vim and VS Code/Sublime/Atom fulfill different needs and preferences.
I'm curious about your answer to this: would you argue that MS should combine Word and VS Code into one text editor?
