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Cloudflare don't hoat sites, but they do end up being a 'man in the middle' attack on any site they proxy for, regardless of where that site is nominally hosted. That ends up exposing all traffic on those sites to a US corporation, and ultimately the US government. Considering that Cloudflare proxy somewhere between 19% and 40% of all websites, I think that's pretty alarming.
It's not an attack of you pay for it
You'll be attacked and pay for the priviledge! I suppose what you're really paying for is knowing who's attacking you. Mind you, I think it's free for small sites, which is probably quite an attractive trade-off for many.
I don't get the 'man in the middle' part. Is the ssl key for the encrypted https connection not from LW, but from cloudflare?
It's still problematic that they have metadata of the connections.
For cloudflare to encrypt the traffic they need the key.
But isn't for https the traffic supposed to be e2e encrypted between the client web browser and the server hosting the web page with the same cert? Does cloudflare decrypt and then re-encrypt the traffic data?
You see the problem. Yes, cloudflare decrypt the request from the browser, inspect it, then reencrypt it and send it to the host server. Then they take the response, decrypt that, inspect it, reencrypt it and send it to the browser.
Basically there are two TLS flows, one from the browser to cloudflare, and one from clourflare to the host server. Between those, on the cloudflare system, both the traffic and response are in plain text. That includes usernames, passwords (for HTTP basic auth anyway) and any sensitive data you send or receive.
Given that they front sonewhere between 19 and 40% of all websites, d£pending on whose stats you trust, that should be pretty alarming.