So what should you use for let say, a backend API service? Don't tell me beanstalk/fargate/etc, because they're actually more expensive.
That’s how just about everyone does backend API services with AWS. You’ll be shocked at how cheap, scalable and bullet-proof it can be.
Lambda, etc, just doesn’t scale well financially if you’re doing millions of requests per day.
The other drawback of lambda is the flip side of having the server opaquely managed by AWS. It is so opaque you can't debug anything. At one startup we had a weird connectivity issue from lambda to RDS but it was impossible to diagnose given the lack of access so it went on for months.
Had it been running in a VM, I could've diagnosed that within an hour with tcpdump and bpf et.al.