Put simply, App Engine has a higher learning curve. I remember using heroku for the first time a couple years ago, and it was smooth and seamless. Can't say the same about App Engine. Installation isn't a blink, docs are scattered around, and even a simple Flask app isn't straightforward.
I understand they might offer more features, better prices, so side-projects are unlikely their target audience, but nevertheless if they want developers love, it should "just work".