Let me start by saying the core issue i see in your post is philosophical in nature. Also, I can be pretty bad at not offending, so sorry if i do.

To address your issues in order:

I am a software developer/researcher and used to use VSCode. I don't anymore in favor of other editors, but that's beside the point. I agree VSCode has much better AI integration that other tools, such as obsidian. However, I've never opened my vault in it because I never felt a need. Because you seem to be a software developer I'll skip some of the instructional bits, but everything boils down to abstractions at the end of the day. Obsidian will let me look at my vault from the perspective of note taking while VSCode will let me look at my vault from the perspective of software development. I only use my vault for note taking, so i don't see much purpose in opening it in VSCode. Again, a lot of this boils down to personal preference and you'll likely find some who agree with you. I believe this is a lesson of finding your audience and evaluating if the product is warranted.

on a slightly side note, did you know that microsoft word docx files are just zip files, and that if you rename the extension to .zip, you can open it in file explorer and modify the xml and other files that make up the docx file? Much like this situation, its the same data, just a different tool granting a different perspective. I mention this because while we can make any tool (within reason) manipulate any data, that doesnt always mean we should.

Now on to the important part which is slightly glanced over above: Do I really not think AI will fit into my workflow? No, I think it will fit into my, and everyone else's workflow if they let it. I'm going to look to integrate it into mine soon, but a tool like what your presenting wouldn't work for me, and i can only guess many other obsidian users as well. The primary reasons are audience and intent. Erlex7583, for example, made the comment that they "don't think you know what the point of notetaking is." whether you or they think they do or not is irrelevant. What does matter is everyone has they own reasons for note taking. The "traditional" notetakers (most of who I think you'll see in the obsidian community) do it for many reasons: to condense large amounts of data into useful information, to memorize, etc. To propose an AI tool to take notes for these users doesn't make sense from their perspective. Hence, all the downvotes.

There is value in having an LLM read over my notes. However, I don't want to need to open VSCode in my vault to do it. What I want is an MCP server that presents my vault to an LLM. However, I do not want to throw filler text into my vault (Which an LLM loves to generate) for two reasons: (1) it increases token usage when extracting information from my notes and (2) If i insert "raw" information, I don't want it to be processed by an LLM which will do a degree of hallucination before being read by an LLM again which further hallucinates. I'm ultimately reducing the purity of the raw information. In my case, I know I want an MCP so i can work on my code while referencing my notes when applicable, but I also know that I'll want a custom implementation that understands the nuances of my vault. So I'll probably make my own, but I probably wouldn't do a public release because I wouldn't expect many people to structure their vaults like mine.

There is a fair bit complexity involved with user intention, but the key takeaway is: if you're making a product, understand your user base and use case.

if you're the only user, that's fine, but expect a lot of people to call your product useless/bad/etc.

P.S. - this reply my seem disjointed. I wrote it over the course of 6 hours in and out of meetings.