This sounds great. Certainly the IP zealots love it because the code never leaves the walled garden, and it’s a super-secure blah blah environment. Consistent tooling, easy onboarding… you get the idea.
All good until you have an outage. Then your development team’s productivity drops to exactly zero while you fix it and your entire production environment is now potentially vulnerable to defects you can’t fix until the development environment is fixed (better hope it stays running). This is when companies realize that the development environment is actually a service and it needs higher SLA targets than production, but it will never get the attention that it needs to achieve those targets (because it’s just dev, right?).