What problem does this address?

Currently, core dynamic blocks use one of two different approaches to rendering in the editor:

• server-side rendering with ServerSideRender, which reproduces the markup defined in the block's index.php (e.g. Archives, Latest Comments)
• client-side rendering with the REST API and reconstructing the markup defined in index.php in JS. (e.g. Categories, Latest Posts)

The developer docs recommend client-side rendering:

Server-side render is meant as a fallback; client-side rendering in JavaScript is always preferred (client rendering is faster and allows better editor manipulation)

However, it's not clear that client-side rendering does in fact work better:

• Performance-wise, blocks using ServerSideRender load faster than blocks using JS to render the same amount of content.
• Duplication of markup between PHP and JS files makes things messy to maintain and error-prone.

What is your proposed solution?

I'd love to see us leverage ServerSideRender on all our dynamic blocks, but in order to do so we'll need to improve it:

• It shouldn't have to wrap its content in an extra piece of markup;
• It should be able to work with block context (this will also require changes to the REST API endpoint)

Thoughts and ideas welcome!

(This issue was prompted by work on #28265 , where I opted to use to use ServerSideRender but ran into the issue of not being able to use block context to customise markup output.)