It also blows my mind, we are also heavy Datadog users and our Datadog bill is roughly 1/10 of the AWS one. Our architecture isn't fully based on serverless because we like to get work done, but I wonder if that's the only cause or if they are using custom metrics wrong or something along those lines.

If you're paying less than 10% of infra costs for monitoring, you probably don't have good enough monitoring. But if you're paying more than 25% of your infra costs for monitoring, someone is not doing their job.