I think it counts as "allowed" regardless of utility. CF is so massively over-weight on the internet that it's impossible to trust them with anything because if they can be forced to do something by a hostile government (hint: they can be!) then they can get away with it invisibly and affect billions of people.

That is something that should not be allowed to exist. It's one of the reasons monopolies (or even majority-opolies) are bad. It's a weapon hanging on the wall, waiting to be used.

Then I think the real question is why haven't any serious competitors emerged that can handle the essential services that Cloudflare provides?

Are there network effects like what happens with Microsoft in the business computing space? With Microsoft, I'm also aware of a great amount of anti-competitive behavior, and though I haven't seen that from Cloudflare personally and haven't heard accusations of it, I also haven't paid attention.

When I learned econ 101 in high school there was a concept of a "natural monopoly" like an electricity utility, a concept that was probably mostly post-hoc rationalization of the regulatory structures that were chosen a century ago, but it at least was a coherent narrative. I can't see any coherent narrative about Cloudflare's services being a natural monopoly. So I'm left wondering if they are just way better at what they do than anybody else, and perhaps the space isn't big enough to drive a competitor to enter it?

I hope somebody on HN has a much better explanation of this than I do.

Seems more of a moral hazard of government intervention than of ventures whose economies of scale demand large market cap to most economically serve customer needs.