No matter what PR spin anyone puts on it Microsoft is a destructive parasite in the smartphone marketplace. Extorting money out of android manufacturers after it failed to compete is one of the most disgusting spectacles I've seen in the industry.
TL;DR -- Do not put emotions into a business analysis.
It sucks. It props up MS' failed mobile division by riding on the coat tails of Google. But it is how things work right now and the manufacturers are not unhappy enough with the arrangement to ditch Android just yet, so they still feel it's a good enough deal.
(aside: I agree that the philosophical differences between extortion and licensing patents is slim to non-existent but unfortunately that's just how things work right now. That may sound like hyperbole but consider the recent Lodsys lawsuits against indie devs. They honestly may as well be going around threatening to bash in knee caps. They know the small guys can't fight them but they have this crappy law on their side. I'd love for things to change.)
There's a very valid point you didn't address, which is that Google is relying on its search monopoly profits to pump a free product into a new market in order to destroy existing competitors there. Regardless of how you feel about Google or Android, that is a behavior Microsoft was once criticized for when it made Internet Explorer free in order to destroy Netscape. Just something to think about.
It's important to maintain an objective perspective on all mega-corporations with monopoly power to make sure that your emotions aren't preventing you from recognizing a villain. Is Google a villain? In my opinion, they're on their way based on their behavior of the last couple of years.
The only "free" part is licensing to OEMS, and they still need to pay for R&D for making physical devices. So that part has no bearing on OS-creators who also happen to manufacture their own devices like Apple and RIM.
Until there's an example where they are using patents offensively, it's unreasonable to claim that they're planning on doing it, especially since they have repeatedly and publicly claimed that doing so is unethical.
Oh, and that's why we blame Apple/Microsoft for using the patent system in this manner. It's unethical.