It allows you to incrementally migrate off of providers like S3 and onto the egress-free Cloudflare R2. Very clever idea.
He calls R2 an undiscovered gem and IMO this is the gem's undiscovered gem. (Understandable since Sippy is very new and still in beta)
Amazon uses $/gb as a price gouging mechanism and also a QoS constraint. Every bit you send through their pipe is basically printing money for them, but they don't want to give you a reserved fraction of the pipe because then other people can't push their bits through that fraction. So they get the most efficient utilization by charging for the stuff you send through it, ripping everybody off equally.
Also, this way it's not cost effective to build a competitor to Amazon (or any bandwidth intensive business like a CDN or VPN) on top of Amazon itself. You fundamentally need to charge more by adding a layer of virtualization, which means "PaaS" companies built on Amazon are never a threat to AWS and actually symbiotically grow the revenue of the ecosystem by passing the price gouging onto their own customers.
First a lot of these roads are 'free' and yet you're still being charged for it. If two large networks come to an agreement then they connect the two networks (ie build that road), but no money changes hands.
Second if there is a paid peering agreement in place (ie say AWS had a cost to push your data out), that still wouldn't be billed to them in the way they're charging you. Instead they'd be paying for the rate of traffic at something like the 95th percentile of the max. This means that you could download a petabyte of data from them when the pipe isn't busy and cost them nothing, or you could download a gigabyte when it's busy and push up the costs.