That is not fully true.
It became a lot more true during 2013, but CloudFlare had already been operating for a few years then.
A lot of fairly simple code was retired to the profit of Lua code, which is way easier to maintain.
There are still important modules written in C and compiled with Nginx. There are also proprietary extensions of the ngx_lua api to manipulate internal some internal aspects of Nginx within the scripts.
source: I wrote a good chunk of both iterations.