In some countries ISPs work closely with the government and block certain websites the government asks them to etc. In these cases I would trust cloudflare over my ISP
Everyday people who are worried about state-actor threats - an incredibly targeted and unlikely scenario for the average person - but are less concerned about their personal information being harvested for marketing purposes - something that happens all the time to everyone.
Even if the foreign government spies more nether jurisdiction is likely to care enough about you specifically to make an international case of it.
In other words I'd think most Americans would be better off proxying through Europe, and most Europeans would be better off proxying through the US.
Even better would be to proxy through a third country that your own country is unlikely to cooperate with, and which won't care about you personally.
E.g. I wouldn't want to live in Iran or North Korea, but I'd think proxying DNS through them would in some way maximize my privacy if I was living in Europe or the US.
I'll never travel to either of them, and my authorities are vanishingly unlikely to cooperate with either of them for anything short of murder.
I agree with you that people should be more worried about companies collecting their personal info, but we know now that the state collecting your data isn't incredibly targeted or at all unlikely. They just take everything. It's happening to every last one of us every single day. It's been going on for decades.
https://en.wikipedia.org/wiki/Room_641A https://en.wikipedia.org/wiki/Russ_Tice