Microsoft can't have it both ways. Crippling open tooling in order to extract more revenue or drive lock-in will undermine their efforts to make .NET relevant outside of the niche occupied by traditional .NET shops. I can't imagine that there's a business justification for this decision that is compelling enough to offset the long-term damage to .NET adoption and community trust.
How are they going to extract more revenues with a proprietary Intellisense VS Code extension? At best they're locking you in their ecosystem, but they don't profit from VS Code directly (emphasis on directly).
When they achieve enough lock-in, that'll likely change.