I don’t think caching benefits Lemmy and PieFed content that is changing very rapidly (e.g. new comments). That type of caching makes more sense for Lemmy/PieFed images.

However, bot traffic can get very expensive these days with all the AI crawlers. Cloudflare offers very good tooling to block these bots. I know there are other open source tools and I’m not defending Cloudflare, but it’s also easy to criticize when you’re not the person running the instance. From what I’ve seen, all the admins work very hard to keep the threadiverse running. I’m guessing that’s why a lot of instances are using Cloudflare.