Actually, it's been shown, off and on, that unbridled "free" actually builds the audience.
There are always free books. Project Gutenberg had free books for 30 years before ebooks took off. They built an ebook readership, which Baen Books built on. Baen Books built a larger ebook readership -- a really solid one -- well ahead of Kindle, largely on free books. Every author who agreed to make their book free saw a surge in readership -- but then, so did all the other Baen authors. And it also helped SF in general. Libraries are always with us. As are ultra cheap book sales for paper. Children gain the reading habit at a time when books are provided to them for free. In WWII publishers provided their entire booklist to soldiers on the front lines -- and saw a surge in sales after the war was over.
None of this is just samples and first book marketing gimmicks. These are examples of wide-spread FREE. So many free books that nobody ever has to buy a book again if they don't want to (which is true regardless of what publishers and writers do -- it's a genie that won't go back in the bottle, ever.)
What happens when you have ubiquitous free books, is that you build the audience of people who are in the habit of reading books. It's like coffee. Coffee made at home is ultra cheap, and it's not hard to learn to make it much better than you could buy. But people will spend a lot of money on it... specifically because it's ubiquitous. They can get it at home, they can get it at work. It's everywhere. They WANT it because they get to have it all the time. They LOVE it because of the same thing.
IMHO, the early ebook pioneers (a few years ago, yeah) didn't just gather an audience with their 99 cent and free books -- they CREATED the audience that the rest of us benefit from. This is especially true of those whose books appealed to younger readers, who got in the habit of reading lots of ebooks while they were cheap, and now will pay for what they like best.
I don't think it's good to undervalue your work -- if you're trying to make money, it's bad for your business -- but I have nothing against an excess of free or discounted work. It may or may not be wise for the person offering it, but the rest of us benefit from it.