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How would you outcompete major CDNs/existing caching schemes already being paid for?

They don't reduce request count. For example, Chrome only allows 6 concurrent connections (requests).

If you load 10 images in 1 request, you've reduced network latency and avoided the connection limit.

Does that limit still apply with HTTP 2 and HTTP 3?

Yes, but multiplexing does minimize the problem. You could multiplex batched requests for hundreds of resources with my strategy.