If CloudFlare is so concerned about it's other customers, it would have just disconnected the proxy's services and applied to have the blockade removed, not "threatened" to disconnect the proxy.
Any reputable cloud provider would disconnect any of their customers deemed to be hosting illegal content.
But no, they're going to strand their other customers rather than strike down the one customer that is actually causing the problem in order to score "political points" about ISP responsibility.
Feh. Whether you feel that "piracy" is wrong or not, it's clear that if the legal system is mandating the blockade of one of your customer's services, you should be getting rid of that customer, not whinging about how the blockade is affecting your other users.