Can Azure Logic App be a workflow engine for a workflow module in a cloud service?

I am creating a web service that contains a workflow module when user will be able to design his own workflow from pre-defined steps, including condition, triggers, and some human workflow tasks.

I don't want to start from scratch in building the engine. However, it's OK for me to build the workflow designer / form builder, etc.

The question is, Is Azure Logic App a good solution for my scenario?

I've been playing around with it and it seems to me more SaaS than PaaS but for developers who wants to automate some backend tasks rather than a workflow engine.

Yes you can use Logic Apps for this, and we have a few customers (like Plexure ~28 min mark, and obviously Microsoft Flow) - but as you noticed there are some areas to be aware of:

• You can generate a valid workflow definition which will perform reliable/robust workflow executions on behalf of your customers.
• If you need to utilize connectors, there currently is not a way for external users to authenticate with our OAuth-based connectors outside of the Azure Portal due to limitations on redirect URLs -- so some connectors may not be possible
• The designer is currently not hostable outside of Azure, so you would need to have/host your own GUI

Other than that it should work as expected, and your platform can still benefit from the reliable execution, serverless scale/management, and monitoring that Logic Apps brings. Let me know if that helps or if there are missing pieces that you would need.