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If browsers began accepting all free / self-signed certificates [...]Right now, browsers are accepting any unencrypted old HTTP connection without any warning, while non-verified securely encrypted connections are actively prevented. Tech people can circumvent the block, but normal users cannot. Nor do they have any reason to because the warning they are being shown sounds like the end of the world, while any unsecured connection looks perfectly fine to them. This is something that could be done right now to make everybody more secure, at no cost, but it threatens the business model of companies like Verisign.
Nobody is suggesting that browser makers should display the much-sought-after "lock of absolute protection" icon on any random SSL connection, I'd be fine if they reserve that for paid-for-certs. I'm merely suggesting they show free (or even self-signed) certs the same courtesy as basic HTTP, the most permissive protocol of all time, instead of actively preventing users from using encryption.
I agree with you about the threat of "Firesheep FX" and believe Wifi connections should probably all use WPA2, even at coffee shops where internet access is free. The threat of MITM is real, but the attack can be made more difficult using a number of schemes, and it even includes free certs that offer way more protection than any unencrypted link ever could. Yet, we are currently encouraging unencrypted connections while actively blocking encrypted ones.
If HTTPS could have the same UI mechanisms as, say, an SSH connection I'm convinced the online world would be a much safer place.