Problems with onInit in 1v79

Nope, to me that code looks absolutely fine.

It could be that your USB power supply doesn't supply enough peak power for the ESP8266?

I'd try:

• Use LED1 and LED2 to help you display information about what's happening (whether it's connected and so on).
  
• Get a USB-TTL converter (they're really cheap, but you could use another Pico if needed) and wire it up to B6(Pico TX) and B7(Pico RX). You can then connect with the Web IDE on your PC and see exactly what's happening, without the board being connected on USB. Actually having something listening on pin B6 won't affect the Pico at all, so it's probably the easiest way to debug.
  
• Solder a big (47uF or so) capacitor to the WiFi shim - it should help to even out the power consumption of the WiFi module, and might solve your issues (if power consumption is the problem)