We do, and they are pretty cool but incredible limited.
For one, you have to limit yourself to vscode and/or other IDEs with this capability - which ought to be a dealbreaker right there.
But then you still have issues around syncing permissions and paths inside+outside the environment. And that all your other windows have a different view into your project.
That alone is another dealbreaker (which you can bandaid, but...).
And then if you need access to USB devices, well for one I hope you are running linux but even then that is a frigging nightmare. And there is some headache balancing everything above with admin rights etc.
Yes in theory it is perfect. In practice we are not nearly there and you quickly realize the effort to do this well is orders of magnitude more work than just running native.
I still always have a container for continuous integration in a way that you can run it easily on your workstation and can be turned into a devcontainer and/or built manually for small fixes in an old project you haven't used in a long long time. Which is great!
But for your main development? I really tried but it is a nightmare in disguise.
Why not VMs? With the kind of computers dev have, I'd think it be trivial to have a VM dedicated to one project (unless you're doing gpu). This means I don't have tooling associated to projects (databases, webserver) populating the main env, only personal stuff.
Nice in theory but not worth it.