This approach works on a small scale, but it seems like the logic should be at the application layer. Secrets, API keys, ACL, etc all need to be duplicated on Lambda. Developers can't easily run it locally. Testing (eg integration testing on database migrations) is separate from the core app. Build promotion / rollbacks are different than the core application. Error tracking / logging may be different. Monitoring will be separate.
Seems like a cool demo, but I think that running the code will have more overhead than writing it.