No, it isn't cruel.
https://www.google.co.uk/search?q="keeping+cats+indoors"
A number of animal welfare organisations condone it.
Did you read any of that BS though?
Peta (American) compare it to letting your child run out of an open door

7th Heaven write such utter BS no normal cat owner could keep a straight face "
an outdoor cat will only live 2-5 years..."
In general American sites promote it (more urban perhaps) and UK sites are horrified at the very thought. Especially this idea that a bored cat is better than one run over by a car, that is just weird.
UK RSPCA do not condone it
UK Cat Protection do not recommend it
Cats are predatory and actively hunt, dogs don't, this is why dogs don't suffer from the same levels of depression that cats do if confined into one space. You can't keep an intelligent animal entertained with a few plastic balls and a bag filled with catnip.
I know of a number of households that keep cats, some keep them in all the time, some let them out.
There is a marked distinction between the two, the indoor cats are noticeably more timid and neurotic than the outdoor cats.