@rysiek According to https://www.cloudflare.com/network/ there are 330 data centers, so that may make it less accurate in the general case.
The quality of data-mined locations associated to IP addresses can however result in similarly accurate or inaccurate locations (also depending on the privacy hygiene of the ISP, the user and other devices using the IP). Another anecdotal evidence: I'm sometimes supposed to be in Lausanne according to IP-based geolocation lookup which is ~180km away from me (and some websites switch to French, yay).
I'll agree it's not the same thing on a technical level, sure, but would need more data to assess whether the location quality is several orders of magnitudes worse as you claim. In the end, it's similarly bad that it leaks.