"More importantly, AWS itself is locked-in to its integrated approach: the entire service is architected both technically and economically to be an all-encompassing offering; to modularize itself in response to Cloudflare would be suicidal."

Eh, somewhat. AWS is already modular in a lot of ways. You want S3? You got it, no matter where you are. (We're talking after them doing some sort of fee drop here.) You want to run exactly one EC2 instance? No problem. You want a message queue? You don't need anything else. You can integrate it with the notification service but it's optional.

Sure, some of their services are integrated, but a lot of that integration is just "this service pulls from S3 and writes to S3", not massive integration at every level.

There is some stuff that is deeply tied in, yeah. But it's not like every single AWS service is deeply tied into half the other ones and the moment you open an EC2 instance you also are buying into a dozen other services. (It may feel like it if you put together a network and override the default block storage, but that's really just giving you knobs that are simply preset elsewhere, not really "lockin".) A lot of it is already pretty modular.