I think there is a useful distinction and place for this.
Lambda is for shared-compute. You don't need a dedicated server to run a "function" that takes < 60 seconds and can be called in a stateless manner as an API endpoint.
This is dedicated host compute-heavy batch processing. It's a pain to do this at scale!
I've built systems for running large scale life science embarrassingly parallelizable problems on EC2 and wish I had something like this!
Imagine you have a set of input S3 files, each needs multiple-hours of compute to produce output S3 files. Doesn't seem that hard, until EC2 instances fail, programs crash, etc. etc.