Worryingly, indeed. To me it appears that the "cloud" is the next bastion of centralization and "too big to fail"s. In this case, instead of providing services in a decentralized fashion that makes it hard to attack, they hide behind ever larger and stronger behemoths.

In the case of cloudflare there is no great data loss if they disappear, though they could intercept passwords and private data (can you trust them? who has access? what if they are hacked?). But when a service such as gmail (suddenly) disappears... it would be devastating to many people. Much like the failure of a bank.

Yeah, but you also already have to trust the certificate authority, your ISP, your employees who have access to the server...the list goes on.

Furthermore, I believe the way it works is that clients make an SSL connection to CloudFlare, who makes another SSL connection to your service (using different key pairs.) Granted, they still get to see all your traffic unencrypted, but it all just comes back to trust.