Maybe, but there are a bunch of smart folks here too, and no one can come up with a good reason for this costing $2k/year.
It's possible $166/mo is not enough of a hit on his income so as to be worth spending time optimizing (unlikely considering how little time it'd seemingly take to optimize), or since he works for AWS it could be sponsored (which would mean he has to justify the continued cost to his bosses when they ask about it).
All valid reasons, but not technical ones. Either there's some aspect of implementing this that we're not thinking of, or there are non-technical reasons involved that we're simply unaware of.
That's probably true. I'm paying around 70 USD per month for Azure Functions (an equivalent of AWS Lambda) because they charge like crazy for disk read/writes and my application is quite tiny, definitely could fit on a raspberry pi. But I don't bother to optimize.
I've hosted more dynamic webpages with large amount of traffic on servers that were costing me 20$/month.