Because it should really just be called Functions-as-a-service, and they are great for single-focus reactive/connective processing and 1-off tasks but are not a replacement for everything as people try to use it for.
As a consumer, I essentially get to treat it as such - there is no server I need to manage.
In AWS-land this is a big differentiator over a system I have to manage, such as EC2, that just executes containers (meeting FAAS). Now I have FAAS and I don’t have to manage the infra, which is huge because AWS will be far better at meeting a patching SLA than I will be.
Yes, obviously there is a “server”, but I don’t have to think about it.
No server to manage is the least important part of it all. It should describe the abstraction that's actually being offered: IaaS is servers, PaaS is a single app, FaaS is individual function, SaaS is just software.
Any of those other than IaaS itself can be "serverless".
We called that "PaaS" for years, why does it need a new name suddenly? Especially a new name that can cause confusion with things that actually do not have a dedicated server?
For me serverless is pay-as-you go pricing, no over- or under-provisioning and last but not least, no server-management.
Lambda, DynamoDB, S3, AppSync, Device Farm, Aurora, etc. are all serverless.