The calculations are still a little more complicated. I think serverless is the future, but I also think we need to continue to put pressure on AWS to lower costs

Lambda and servers are not equal, you can't just calculate the number of servers one would need for an equivalent Lambda load. It's entirely possible that they could get away with significantly fewer servers than you think.

Your cost calculation includes 128mb provisioned. You cannot run an API with 128mb Lambdas. Try 1gb or even 1.5gb. It's not that you need that much memory of course, but if you want to have p98 execution and initialization times that are palatable, you need the proportional speed benefits that come with the additional memory.

And no, you won't need API gateway because you'd likely be including your own in your cluster and it will handle far more load without needing nearly as much autoscaling as the app servers.

Lambda autoscales too - it's not instant, and there are steps it goes through as it ramps up.

If Lambda removed the per-invocation overhead and billed for actual CPU time used, not "executing" (wall) time, I think that would be fantastic. Again, I still think it's the future, but it has a ways to go before it's appropriate for certain use cases and load profiles.

Edit: oh, and I think the managed ROI is also a case by case basis. Do you have people who know how to run a cluster for you already? Completely different conversation.

I will also say that Lambda is still not maintenance-free, either.