Cloudflare is not an official government entity. As a business you have the right to refuse service to anyone. Refusing these websites service is not the same as being thrown in jail.
The link in question.
> We are a "DDoS for Hire" company
> Our best layer 4 UDP attack methods is dns amplification, ntp amplification, ssdp amplification
You think they are going to amplify on servers they own?
Dozens of ddos for sale websites being advertised on hackforums being protected by Cloudflare.
http://hackforums.net/forumdisplay.php?fid=232
http://whois.domaintools.com/serverboot.com
http://whois.domaintools.com/synstress.net
http://whois.domaintools.com/kronosbooter.com
http://whois.domaintools.com/instress.club
http://whois.domaintools.com/clickboot.co
And countless more.