Cloudinary has two parts - a Digital Asset Manager for storing content - an service for optimising / resising images (and video) that then uses Cloudflare, Fastly etc as a CDN
Akamai, Cloudflare, Fastly all already have image optimisation services, so if you're using them already why use Cloudinary.
The DAM piece is more of an issue as most CMSs aren't great on the asset management front but looking at commerce etc platforms they're getting better
The only thing that is shitty about the cloudinary model is the bandwidth costs. If someone could combine the functionality of cloudinary (it is genuinely unmatched in the space) with the cost of cloudflare... I'm in. They're even doing a great job on video editing (changing encoding format, bitrate, container, splicing in audio, cropping, thumbnail...) again using the same "just change the url and it's done" approach.
Saying CDNS will eat this by offering mediocre asset management is not apt.
Regarding the DAM: CMS and Ecom systems are indeed getting better, but media assets you upload to them become siloed in the CMS. Cloudinary acts as a headless DAM that you can embed in any CMS and use as a single source of truth, relieving a lot of the pains of handling media files and their versions.
FD: I'm a Cloudinary employee
I've also used CDNs and CMSs to achieve the same thing including invalidating images in CDN caches when they change
Given the choice I'd always go for a solution that uses one of the good three CDNs combined with a CMS that can invalidated edge content