Programming languages teach you to not want what they cannot provide" (Paul Graham). Scale systems can be just as restricting.
The ability to see arpeggios and scales in your head is vital for any guitar player. Are you able able to imagine them on the fretboard? If so, how did you learn to do it? If you used the CAGED system, then you might still have some work to do.
A very common and troublesome issue with the CAGED system is the way scales and arpeggios are integrated together into the system. It's ironic, because learning how to play these patterns is one of the biggest "marketing" reasons why the CAGED system is so popular: lots of people learned CAGED just to get an integrated knowledge of scales and arpeggios. And because of that, many people have picked up a flawed, inefficient system and spend countless practice hours to make it work.
Since this integration is one of the most publicized "strong points" of the CAGED system, it is just natural that when an instructor like yours truly who is critical of the CAGED system states that there is a problem, the Internet goes into a frenzy. Although, most of that frenzy comes from a simple misunderstanding of what the apologists and critics mean by the word "integration". Indeed, there are TWO meanings for this word in this debate, and being able to understand the difference is key to understand what is going on.
The CAGED system DOES incorporate the memorization of scale shapes and the positions of the chord notes inside them, which we will call the "visual" integration. But visual integration works in any system: no matter which patterns I use to play a scale, I am in principle able to point to the arpeggio notes in it.
What guitar players actually require, on the other hand, isn't simply visual integration: what is actually beneficial is called "mechanical" integration, meaning the possibility to fluidly move between a scale and an arpeggio as they play - and making sure that both the scale and the arpeggio patterns are playable. This is where the CAGED system falls short.
Of course, this is something that can be seen only when scales and arpeggios are actually played on a guitar fretboard, as opposed to just watching scale/arpeggio patterns on a piece of paper or on a computer screen. As such it is much easier to show this point practically than it is to explain in words, so be sure to watch the following video to see how this concept actually applies to guitar playing.
This example shows why mechanical integration is the best feature to have rather than a simple visual integration: it doesn't just help in real playing situations, it will help make all of your playing more consistent, and will help get results from your practice efforts much quicker than other methods. My previous video also shows a prime example of this: CAGED Sucks part 1: Right Hand Consistency.