It's actually somewhat different. AWS Lambda is intended to act as your origin server. Generally your Lambda functions run in a small number of locations, not necessarily close to users.

Cloudflare Workers will run in all of Cloudflare's 117 (and growing) locations. The idea is that you'd put code in a worker if you need the code to run close to the user. You might want that to improve page load speed, or to reduce bandwidth costs (don't have to pay for the long haul), or because you want to augment Cloudflare's feature set, or a number of other reasons. But, generally, you would not host your whole service on this. (Well, you could, but it's not the intent.)

We haven't nailed down pricing yet, but we've worked hard to create the most efficient possible design so that we can make pricing attractive.