There is absolutely nothing wrong with using these as feeder sites or link generators for your own domains. Most of my thumblogs rank very well, and they point GREAT link power to my money sites.
There is VERY FEW domains in the world that hold massive weight in google and let users create and host their own pages on them.
Anyone not taking advantage of stuff like this is foolish.
Think of it this way if you need to, every pr3-pr4 blog you have on a free hosted domain can be used to A-B-C 20 fresh hardlinks into your money pages.
I had hundreds of blogspot blogs back in the day, and people always said "your wasting your time, you will lose them" and I did, but not until i pulled 6 figures out of them.
Step outside the box and use your brain
Making money has no borders like "domain" and "free".
Seriously, biggest fucking myth in this industry.