FaceFighter hadn't been doing badly, but offering it up for free not only increased its downloads to several hundred thousand (which sounds like a lot for Appy), but put the new game in front of a whole bunch of people who otherwise might not have heard about it. And Tune Runner is a "freemium" app -- you get the first hit for free, and can buy more premium content inside the app. With an example like this, why would a developer not go with a freemium model? As Freeverse's CEO told us, customers may complain about the model, but assuming your game has the quality to support it, it's the best way to monetize the App Store's huge audience.
That's not to say that the paid model should be abandoned for good -- even Appy says they plan to release a paid version of their app with the in-app purchase content already unlocked. But for all of the murmuring about the freemium model, it certainly seems that customers' actions are different than words on the App Store.