VS was never #1 IDE for web dev. For a long time, it was Dreamweaver (not sure right now). I don’t think it’s fair to say it has lost ground.
Eclipse was never much of a player either, unless you’re talking solely server-side, in which case Eclipse and VS competed.
This is not a reaction to anything market-share related. It’s simply part of the plan of a more open Microsoft. Where we do gain here is in Open Source. It was always hard to recommend Visual Studio for open source because the free versions were not fully featured, and the pro version cost actual money.
This is an enormous change from just a couple years ago when Hanselman and I had to work quite hard to convince executives that removing console app support in free editions was a deal killer for many uses. Without that, there would be no free IDE for Gadgeteer or NETMF, among other things.
Satya’s “do the right thing” attitude has made a huge change to how groups operate inside Microsoft. It flows down through leadership in all the orgs. Except for bursts of news like this, it can be hard to see that from the outside. Not every org is as quick to move forward as others, but I can tell you that on the inside, it’s a new company. It’s the company I want to work for. 
Pete