Given the number of people on HN who report massive problems from scrapers and other bots, it sounds like if Cloudflare doesn't do this, someone else will need to. I might have thought bandwidth was cheap enough now for it not to matter, but I guess the bots are costing some sites a lot of money.
As for the bots, I thought the same thing, but it is indeed a huge problem. They've brought my websites down pretty frequently recently. I tried Cloudflare but visitors complained, and I think you can't win against the bots anyway, so I've resorted to performance improvements and serving every request.
- let more traffic in, eat the compute cost
- block larger cohorts of traffic, affect many real users
- babysit the rules to get them just right, lose time doing that
In my experience the residential proxies exist but are not that common and many aren't trying as hard as they could. It's really a war of which side wants to spend more attention on the problem.