Except then you still have to cover the demand from requests which bypass Cloudflare through the dnslink entry.

Essentially it's a gimmicky system which is propped up by using Cloudflare, which ultimately fails once it actually gets user adoption, in a way the tradition setup (CDN + basic or even free hosting) would not. This only works because most users don't have IPFS support currently, and if they did the servers would grind to a halt just as they would with no CDN at all.