Cloudflare's offering does not compete with Lambda at all. They have completely distinct usecases.
Cloudflare Workers at best compete with Lambda@Edge, which in spite of its name is actually a CloudFront feature.
(Disclosure: I'm the tech lead of Workers.)
Based on what I understand, there are still a few things missing to compete with Lambda's asynchronous use-cases. e.g. Step Functions, 15 min time limits, non-cron events (i.e. events for every CF product), batching events into the same execution, etc. While some of these are technically "not part of Lambda", to compete with Lambda CF needs the ecosystem as well.
Disclosure: 1. I'm an AMZN investor, therefore calling out that the ecosystem is worth keeping in mind. 2. I'm a NET investor, therefore calling out that I'm looking forward to seeing the ecosystem develop :)