What's old is new again. We were doing this (and with any application, not just IDEs) back in the early 90's with X-windows. X-server local, compute engine where-ever you could borrow/steal/hack it.
As recently as the mid-2000's, my personal computer had virtually nothing in terms of development setup, except for a terminal and an IDE. Even our files were stored remotely (although within a local datacenter, not on the Internet) and we either edited them directly on the terminal in VI, or in an IDE, with the repository working directory Samba-mapped. All builds, tests and deployments were on remote servers. Compared to those days, today's build and test setups seem nightmarishly complex.
Sun Microsystems went all in on this approach. I never worked there, but as I understand it everyone simply had a dumb graphical terminal at their desk.
You might(?) be thinking of the SunRay stuff, which was certainly not X-windows based, though similar in concept/architecture. There was never a time when "everyone simply had a dumb graphical terminal".
(I never worked directly for Sun, though I did have a hell of a lot of dealings with both the Church and State sides of their business.)
