VCI absolutely can be deadly to the baby. A CS us a MUST. One of my friends lost her first because they didn't know about it and nearly lost her second and they did know. If the doctor tries to downplay it find another.
Just to put this out there....I talked to two midwives, two OBs and two perinatologists when they thought I had velamentous cord insertion (ended up being marginal) and none of them thought a CS was a "must" as my cord insertion was way high. They said that in my case they would closely monitor the baby during birth and if needed (if she wasn't tolerating the contractions) could do a CS in moments. I was told by many on the internet to push for a section anyway, but the truth is prenatal diagnosis of this condition is in its infancy (no pun intended) and there is no standard of care for it. Some doctors will check someone with VCI into the hospital at 32 weeks preventatively, some will put no restrictions on you whatsoever.
If a patient has vasa previa in addition to velamentous cord insertion, in that case you are correct and a c-section is an absolute must. That situation is pretty dangerous and almost always fatal when not prenatally diagnosed. When prenatally diagnosed and given correct care, even vasa previa (the worst-case scenario for someone with velamentous cord insertion) has a survival rate basically the same as someone without any cord complications. But yes, a section is a must in that case.
So, so sorry to hear about your friend.