How does Istio compare to Traefik?
It's something of an apples-to-oranges comparison.
Edge proxies like Traefik or Nginx are best compared to Envoy - the proxy that Istio leverages. An Envoy proxy is installed automatically by Istio adjacent to every pod.
Istio provides several higher level capabilities beyond Envoy, including routing, ACLing and service discovery and access policy across a set of services. In effect, it stitches a set of Envoy enabled services together. This design pattern is often called a service mesh.
Istio is also currently limited to Kubernetes deployments in a single cluster, though work is in place to remove these restrictions in time.
As Mark O'Connor responded, Istio is not just a load balancer or reverse proxy for K8S. Its a full microservice mesh, for inter-microservice communication as well as API management at the edge, with extensive support for monitoring and security (authn/authz). Please take a look at here for more information.