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IP address blocking banned in Austria after court ordered ISP to block Cloudflare IP's
(torrentfreak.com)
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You only see one side of the coin (government broke a huge swath of the internet by blocking cloudlare's IP addresses). Now consider the other side of the same coin: when cloudlare decided it doesn't like your IP address, suddenly you're blocked from accessing a huge swath of the internet. This isn't hypothetical either. It's already happening in places with IPv4 scarcities which forced ISP to put their customers behind CGNAT. Cloudlare see this as a single IP address generating huge amount of requests, and when it blocked that IP address, suddenly a huge amount of people are blocked from accessing a huge part of the internet and instead get the dreaded captcha hell. People from US and Europe haven't seen this issue too often because they have disproportionate amount of IPv4 allocation compared to the rest of the world, but if you want to have a taste of what it's like running afoul with cloudlare, just use TOR or a cheap/free VPN and see how many sites suddenly become inaccessible due to cloudflare deny rule.
I employ VPN, TOR, and additionally, I manage sites utilizing CloudFlare. I can tell you this much: There aren't many alternative services that safeguard your website and gather statistics while respecting the privacy of the end user. CloudFlare even provides onion routes for TOR users, which I've naturally activated for my website. Thus, the issue doesn't rest with CloudFlare; it's a tool. The true issue lies with the webmasters abusing their power and using overzealous rulesets.
They could easily apply the same rulesets by utilizing nginx to proxy the traffic and implementing blocks on their side, avoiding CloudFlare altogether. The only distinction would be the increased expenses and a different host, nothing more.