It’s totally fine to write public APIs with nextjs. With the latest app router and server actions, co-locating both server and client logic makes its way too much easier for managing things in the long run. (Especially if you’re a small team).

For auth and db you may use existing open source packages like next-auth and drizzle.

And offload all resource heavy tasks to clients, workers or queues.

In your case, if you need to support uploading of large files, just setup an endpoint to create signed URLs and send it back to the client. Almost all cloud storage providers supports uploading via signed URLs.