The impulse for Free Stuff isn't necessarily a bad thing. In fact, it's a perfectly normal aspect of human behavior.
Daniel Ariely, for one, discusses the "power of Free (as in gratis) in Predictably Irrational. Basically, setting the price to $0.00 has an enormous draw of its own, far beyond mere economic aspects.
For example, let's say we have three promotionally priced ebooks available for one week only, and you can only take one. One promo is 25¢, the other is 0¢. Which promo interests you more? Which one feels more like a lost opportunity at the end of the week? Which one would you feel is a "better deal?" And which one do you think will get more takers?
I for one have no doubt that the free promo will be wildly popular, while almost no one would take the 25¢ promo. The most trivial of costs is sufficient to attach a monetary value to the process, and that changes the way we treat it.
I can't say much definitively about the prize examples, except to surmise that for those people, perhaps "winning is its own reward." Nor should we expect a randomized contest to reward those who desire it most, or will appreciate the prize best.