You'd have much higher latency working on the remote VMs than on local VMs. You'd also be dependent on Internet connectivity and you'd have to rely on Hetzner's machines being available whenever you need to do your work. Shit does happen.
Pinging my existing Hetzner servers is around 45ms which is acceptable latency for me. Reliability from Hetzner hasn't been great for our servers but for what I need it for it is reliable enough.
Just remember that with the lower end dedicated servers you are dealing with desktop class hardware. With the last server I received from them one of the HD's in a raid1 was dead and although they replaced it quickly I was required to reconfigure it wasting quite a bit of time.
