I don't really see there being a difference in Baen making their books free, vs books actually being free from other sources.
I know legally there is a difference. And I guess some people actually obey laws out of a sense of being law abiding, rather than because they find those laws just or are afraid of being punished.
Still, it seems to me that people today are pretty much on the honor system when it comes to books (or music, or even movies) these days. If you want to support the with your money, you can. Otherwise you can get them for free.
Personally, I buy books because I want to give the authors money. Partly to reward them, partly so they will continue to write more books that I like.