There doesn't appear to be a monopoly on "serverless" and the term has been used by many vendors including IBM at the last Serverless Conference[1].
There is definitely room for many kinds apps in the PaaS space, including serverless as well as microservices. OP was arguing that existing platforms like GAE have been supporting serverless and can continue to do so. However, the premise of the serverless computing movement is that newer platforms (e.g. OpenWhisk, Google Cloud Functions, AWS Lambda) are better for running serverless applications than traditional PaaSes (e.g. Heroku, Bluemix, OpenShift)
The answer is that Cloud Functions and AppEngine fulfill different use cases. There's clearly room for both.