In my experience, maybe it just isn't there yet, serverless has much more points of failure than a conventional infrastructure. I am sure there a lot of software that really needs the scale the cloud can provide. Funny thing is that we tend to use it for tiny apps, some IOT voice interfaces or BTB tools that we don't want in our corporate network.

I doubt cloud providers can dictate environments, other providers would quickly fill the gap to meet developer preferences. I also think that more developers care about lock in these days.