I don't understand the problem. Why is free so important? For $1/month you can get 5 email accounts with 2GB each at 1an1. If you go to $5/month, you can host your domain on Lunarpages and have unlimited email accounts. There are other services that offer similar possibilities at the same price points. With email accounts so cheap, why is free so important? Am I missing an obvious use case?
When you're setting up a website for someone else, it's much easier to deal with no billing than it is even with $1/year.
Email services provided on the side by hosting companies (or worse, registrars) don't measure up to Gmail or Fastmail. And Gmail is what people will be comparing it to.
