Very good idea, I'd sooner give away a domain name to someone who was going to use it than let some blasted domain parking business get hold of it.

On the other hand, I have no idea how you'd stop domain parkers from actually using the service to get domains for free. With freecycle itself, it's probably quite hard to hide that you're abusing it to make cash on ebay or something, but I don't know how you'd prevent that with non-physical goods.