> I mean Crossplane is a pretty popular k8s operator that does exactly that, create cloud infrastructure from K8s objects.

If your only tool is a hammer then every problem looks like a nail. It's absurd how anyone would think it's a good idea to implement their IaC infrastructure, the one think you want and need to be bootstrapable, to require a full blown K8s cluster already up-and-running with custom operators perfectly configured and working flawlessly. Madness.

Its more of a usecase for large platform teams that want to automate and enable hundreds of teams with thousands of disparate cloud resources.

You can have a small bit of terraform for crossplane then crossplane for the 99% of the other resources

I hope someone somewhere has managed to run a K8s cluster on a bunch of EC2 instances that are themselves described as objects in that K8s cluster. Maybe the VPC is also an object in the cluster.