Sublime hasn’t been killed. It still pretty much has the same market share as it has had in the past years (based on public polls). True, VS Code is used by a larger percentage of people, but that doesn’t make it better per se. People like free stuff and they can use VS Code for free. This is no surprise.
I am grateful that Sublime, like many companies, hasn’t made me, the user, their product to make money, or fed me ads etc.
Microsoft is a big company and has different avenues to make money. And often has different goals they are trying to accomplish with projects like their editor.
VS Code is a fine editor, but it does have weaknesses as well as strengths compared to Sublime. Though, there are people who’ve left Sublime for the VS Code hype, some have come back. One big thing that brings people back is speed, as Sublime is faster.
I’m pretty sure Sublime is doing quite well for themselves. They are a small team and don’t need the massive market share of VS Code to be profitable.