Great observation. And in fact "serverless" is the way that Unix network servers used to work: https://en.wikipedia.org/wiki/Inetd

CGI is also the way the web used to work. Spawning processes has only gotten faster since then. The entire "process spawning doesn't scale to the modern web" argument is completely and totally bogus. Today, spawning a process in Linux is only 10-20 microseconds slower than creating a thread: http://www.bitsnbites.eu/benchmarking-os-primitives/

The performance problems are elsewhere.

What you are missing here is the fact that I/O is orders of magnitude slower than processor. Most of the time in servers is spent waiting for I/O and multiplexing green threads on processes without context switches while some execution paths are waiting on I/O gives you far higher capacity on the same hardware. See the other comment thread on GP comment.

serverless is primarily a decentralisation/small-scale/unpredictable workloads play where you trade off fixed costs of managing a dedicated instance for higher variable per call cost. At any reasonable scale and predictability, running a dedicated server is cheaper.

The folks who started at a small scale in serverless but see traffic growing and kind of are in the middle space before jumping to dedicated servers have an entire art form of keeping their functions "hot" since both Lambda and AppEngine actually keep your functions hot loaded when once it's spun up for some time.

https://www.google.com.sg/search?q=serverless+warm+up&oq=ser...