What problem does this feature solve?

Create a browser-based developing environment (like a vscode online) without any local/cloud host requirement.

For developers, it can reduce dozens of problems from the setup of vite/vue-cli and make online coding collaboration possible and easier.

What does the proposed API look like?

A WebIDE like https://github.dev/ with the browser-based vue 3 rendering and building will be extremely fasinating.

Besides the various existing online playgrounds, you can also create a new scaffolded Vue repo on GitHub itself and set it as a template (eg. antfu/vitesse by @antfu). You create new projects out of it and at the same time leverage GitHub's own WebIDE.