I don't think CloudFlare improved its image as a result. We all agree Nazis are bad. No sane person thinks CloudFlare is pro-Nazi.
Here's CEO Matthew Price in his own words:
"Let me be clear: this was an arbitrary decision. It was different than what I’d talked talked with our senior team about yesterday. I woke up this morning in a bad mood and decided to kick them off the Internet."
The reaction at the time was the same as the reaction here: I'm glad this guy's against Nazis, but he picked a very infantile way to show it.
People who run their businesses on CloudFlare get a little uneasy when they see a CEO randomly turning off websites because he "woke up in a bad mood".