Cursor's show-stopping problem is not if it is useful, the problem is that it is proprietary. These sorts of tools are fun to play with to try out things that might be useful in the future but relying on them puts you at the mercy of a VC backed company with corresponding dodgy motivations. The only way these technologies will be acceptable for widespread use is to measure them as we do programming languages and to only adopt free software implementations.
To an ideological position like yours, I would say... maybe? I, for one, am happy to pay for good solutions and let the market figure it out. If there are open source solutions that are just as smooth, that's great. I've seen a few, but none have been as good thus far.
I've been keeping an eye out for a good, free software development tool like this but I've also seen nothing viable yet. The main problem really seems to be that the required hardware is expensive and resource intensive which keeps most of the talent from being able to work on it. Once the required hardware becomes more common place I think multiple free software versions will pop up to fill the niche.
Have you looked at Continue.dev? It’s open source and allows both local/open source and commercial models. It’s definitely got challenges / bugs (particularly for remote dev) but I think is worth a look.