Remote containers >= 0.238.2 breaks proxy usage

[sveint]

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• VSCode Version: 1.69.2
• Local OS Version: Ubuntu 22.04
• Remote OS Version: RHEL 8.6, Docker version 20.10.7
• Remote Extension/Connection Type: SSH + Containers

Steps to Reproduce:

1. Create a devcontainer.json with a Dockerfile including RUN steps depending on internet access.
2. Use Reopen in container on a machine that only allows internet via proxy.
3. Building the image times out on RUN step relying on internet access.

Upgrading the remote containers extension completely broke our development workflow, as our development server has a mandatory proxy for internet access. After debugging for a bit, I think I've narrowed it down to usage of docker buildx build rather than the normal docker build. In both cases we could use Buildkit for building, so I'm not sure why this change is necessary. Using docker build with Buildkit enabled works, as Docker uses the system-wide Docker proxy configuration that is already in place, even with Buildkit.

I've googled extensively and from what I can see there is currently no workaround possible for making Buildkit pick up a systemwide proxy configuration via docker buildx build. One can add parameters or a config to Buildkit on the docker buildx create command, but that is not used in the vscode workflow as far as I can see. I don't think we can configure that one either in devcontainer.json.

As far as I understand, remote container extension is now completely broken for all users that has to use a proxy for internet access. Downgrading to 0.234.0 fixes the issue, but I'm concerned how long that version will be supported.

Is it a hard requirement to switch to docker buildx build rather than DOCKER_BUILDKIT=1 docker build or can it be reverted until a workaround is in place?