>> There are plenty of cases where lambda is a better fit than hosting a server.

Such as?

If it’s regional latency then run a machine in the region.

Out of the box lambda costs $0 when not in use, built in autoscaling, automatic runtime security updates, stdout straight into Cloudwatch, docker support...the list goes on.

Uncomplicated image conversion / thumbnailing / pdf report generation / whatever that you don't want to keep a whole container or separate long running task around for.

That's all. The rest goes in VMs.

You can have a dev team of 20, everyone has their own Lambda function running at all times so they can run their own branch without affecting others.

When people go home, the dev Lambda cost instantly becomes zero.

You can't do that with (virtual) servers, the cost is exactly the same 24/7. In some cases it's a good thing, some not.

You can't also trivially handle Hug Of Death level load spikes.

Not to mention Lambda uptime vs everything else.

Simple endpoints that have extremely low-volume traffic. If I have a project that has low usage and requires basic endpoints to handle server-side logic, lambdas are by far the cheapest way to do it and fully performant.

I use Cloudflare Workers on hobby projects to provide server side work for things that have low volume, because the price is so low per user.

It's true that Lambdas will become pricier with consistent high volume usage, but for extremely variable usage or low usage, lambdas are a great option.