Does this really count as static site hosting if you use on-demand rendering instead of rendering everything? One of the big advantages of static sites is that the runtime complexity is as minimal as it can be.
For files in site/ that end in .md it does do rendering at the point of serving in some situations. Once it does, it both serves the file and spits out an .html file to serve for the next request. The way I thought about it is that the first request for the file generates it — like a mini hugo build or Jekyll build command running for just one path, and only running after a request has been made to it. This makes the compilation of the HTML just in time and saves processing for files that may never be rendered.
It does have draw backs, and could prove not to be the best path, and perhaps the preprocessing isn’t that big of a deal.