1) He hosted nazi websites, without action even though it was reprehensible speech.
2) He dumped those clients, when they insinuated that Cloudflare was on their side.
That makes it slander, and insinuation that Cloudflare is a Nazi Sympathiser.
I would expect the CEO of such a firm to do something immediately to take care of his firms share holders and its reputation.
He did just that, and improved its image as a result.
How is that a problem? I would expect all firms to act like that, or be known as Nazi sympathisers.
Here's CEO Matthew Price in his own words:
"Let me be clear: this was an arbitrary decision. It was different than what I’d talked talked with our senior team about yesterday. I woke up this morning in a bad mood and decided to kick them off the Internet."
The reaction at the time was the same as the reaction here: I'm glad this guy's against Nazis, but he picked a very infantile way to show it.
People who run their businesses on CloudFlare get a little uneasy when they see a CEO randomly turning off websites because he "woke up in a bad mood".
And instead said something along the lines of “picked a way to showcase his virtue” without the comment on business owners.
1) Nazis, generally 2) Forces trying to literally dismantle the Internet as it has been known for decades
These seem like extraordinary enemies against which extraordinary means are justified.