Azure SQL Database for a long while has been the most cost-effective way of running SQL Server as a PaaS database, and still is if you choose the DTU-based modes, making it a very attractive option. Combined with the rich feature set and maturity and reliability of SQL Server, it is hardly legacy; in fact it's very capable and continues to get new updates like vector operations.

I've helped create apps that support millions to hundreds of millions of revenue on Azure SQL Databases that cost at most a few hundred dollars per month. And you can get started with a S0 database for $15/mo which is absolutely suitable for production use for simple apps.

Unfortunately, I think Microsoft realized how good of a value the DTU-based model was, and has started pushing everyone to the vCore model, which dramatically increases the barrier to entry for Azure SQL Database, making PostgreSQL a much more attractive option. If Microsoft ever kills off the DTU purchasing model of Azure SQL Database, I likely won't be recommending or choosing Azure SQL Database at all going forward. It'll 100% be PostgreSQL.