I have built an image resizing service around this with go and libvips. With go libvips, s3gof3r, you can load s3 images directly into a buffer, pass to libvips, and serve without writing to disk. Basically, you can use edge functions with your origin as the above go service.
How much would you pay for an image resizing service? I'd been thinking for a while of putting a fleet of autoscaled thumbor boxes behind cloudfront and making a billing API for it.
Imgix's $10 minimum is so much for a personal site with maybe 500 uniques a month. If you're going for a service like that, think of people like me who host on s3/cloudfront for $.20/month. But let people scale up to millions of pageviews a month.
Don't need anything fancy. Just w=? h=? would be great, developers can handle the DPI stuff with sourceset tags.