It's not the specialization around hosting that's the problem, but that entities running CDNs realized they're in a privileged position in the network, and decided to capitalize on it.

That's not what CDNs are for. They exist for primarily two purposes: a) speed up video loading for end-users, and b) anonymize IP addresses and routes for businesses.

Cloudflare built a business around b). This doesn't save on hosting costs, only lowers some operational and legal risks.