I was initially kinda opposed to this and preferred "bare metal development" on my local rig. But the performance is actually pretty incredible for remote development with vscode such that I don't really notice things are running on different hardware.
We recently had some new members join the team and I decided to spin up some dedicated EC2 instances for them to use for this exact purpose. They aren't being used yet, but as our stack becomes more sophisticated I think workloads will transition there. It's done with a custom terraform module that also provisions other assets needed for each dev (regardless of local or remote dev) like an S3 bucket, some dynamo tables, IAM roles, etc. Being able to onboard a new dev with a handful of lines added to a mapping is pretty awesome.
tl;dr I would absolutely consider remote dev spaces.