Cloudinary is an end-to-end solution for managing images and videos, for developers. The CDN and optimization parts are tightly coupled with the digital asset management: e.g. if you change an image, the system knows to invalidate the relevance cached images, and is CDN-agnostic. So no, CDNs are not competition, but rather good partners to Cloudinary.
Regarding the DAM: CMS and Ecom systems are indeed getting better, but media assets you upload to them become siloed in the CMS. Cloudinary acts as a headless DAM that you can embed in any CMS and use as a single source of truth, relieving a lot of the pains of handling media files and their versions.