I use Web2py with Google App Engine in production. See https://www.nittiolearn.com.
For storing data, Google Datastore (accessed via web2py DAL) is used except for storing large resources where Google Cloud Storage is used. I have done multiple web2py version upgrades on the production environment in the last 5 years without any major issues.
Google app engine has also been mostly friction-free over the years.
But neither Web2py nor Google app engine has been adopted widely as I had thought 5-6 years ago. If I'm starting a new project, I'm unlikely to go with web2py or app engine as the number of developers who will be excited to work on these technologies is limited.
