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I spoke to a solutions architect on AWS who said that their recommendation for building a new backend service (eg. a REST API) is to use API gateway and Lambda. I definitely got the impression that he meant full-fledged apps.

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I have done some (small-ish) projects with API Gateway and Lambda. Lambda itself is pretty nice. The API Gateway is a pain, and has a lot of rough edges. Especially if you need to do anything other than standard JSON in and out. I’ve spent way more time than I’d like to admit futzing with mapping templates and models to try to get stuff to work the right way. And then dealing with errors from the Lambda function in a sensible way is a headache all its own.

I generally really like AWS and I use it for a ton of stuff, but I very much welcome competition and innovation in this space.

I did this. AppEngine is a far more cohesive and polished service than cobbling together Lambda, S3, API Gateway, SQS and Dynamo (which you'd need to do to actually have a fully functioning site).

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