Some of these forks get re-merged a few years later (see ffmpeg), others don't, but this is not bad at all.
The ideal solution would be to build Caddy with flags that disable telemetry, just like Firefox is built for Debian.
Saying "Caddy was supposed to be great" or "This is no longer just a conversation on privacy; this is a hostage situation" is not right. Caddy is great, but Neflabs doesn't agree with the direction it's taking. The solution is not describing the free software's developer as a hostage taker.
The solution, as you said, is forking.
At any rate having read this article I didn't see anything saying that "the whole project was garbage".
The video (which Matt Holt removed) is also actually worth watching IMO, although I can see why he doesn't want it posted on the forum given its tone.
And still, apparently, some people will use the slightest disagreement to say that the whole project is garbage, just like this article is doing. I think we're lucky that open source developers don't get deterred by these kinds of article, because they sure could be. What does religion have to do with the quality of a free software project ? Does your server run better if coded by an atheist ?
Instead of being disdainful, a more constructive thing to do would be to openly talk about forking, on Caddy's forum, and see the response. If nothing changes, fork and convince people that your fork is better.