We use Node.JS lambda functions for real time image thumbnail generation and scraping needs. As well as mirroring our S3 buckets to another blob storage provider and a couple of periodic background jobs. It works beautifully. It's a little hard to debug at first but when it's set up, both pricing and reliability is really good for our use cases.
I think a lot of people try to use the "serverless" stuff for unsuitable workloads and get frustrated. We are running a kubernetes cluster for the main stuff but have been looking for areas suitable for lambda and try to move those.
Can you share your image resizing code on github? We're using thumbor on AWS but it is a huge PITA.
Setting up your own resizer using sharp[1] is pretty simple. Just make sure you install the module in a Lambda-compatible environment, so it can build its copy of libvips (native C library) correctly. I built and deployed my image thumbnailer on a CentOS VM.