1. It does not seem impossible to imagine a function that spawns code close to data, be it on a VM with a connected fast SSD drive already populated with data. Also, Lambda-at-edge and Cloudflare workers are already more like “shipping code to data.”, or " the customer" in this case.
2. Functions are load-balanced and potentially parallelisable to millions of invocations. The only missing piece is some kind of parallel-invoke call, to give each instance of a function a distinct piece of data to process, and an identifier to save the result under. The identifier could easily refer to a local disk location, in some future implementation.
Also, another point from the article: "FaaS discourages Open Source service innovation". seems wrong to me, as it may be said only about current super-early implementations, reason being, they are new.
In the long-run, I'd expect serverless to help open source, because of a simplicity of deployment. We will likely have projects working on an abstraction layer of compute and storage, hiding the underlying cloud or multi-cloud implementation. (Kubernetes is one candidate, it just needs ideas in the like of Virtual Kubelet to become more serverless).