Terrible Idea. Fuck Complexity.
Proxy for every service? I would fire you for this. Oh, you made managing the proxies manageable? Oh, you can load balance properly? Canary routing? Metrics? OMG, service-to-service authentication? Right, I can do that with clients with far less overhead and time spent and still manage the clients like a proxy. Bye bye.
Service Mesh.... a terrible idea.