If you are going to offer free hosting, you better make sure to define very well the extent of it, the limitations of resources and possibly have more space than what you'd think you'll be giving away, and possibly a contingency plan. I've seen P2H and free web host places having to disappear because the amount of traffic they got exceeded their expectations at a rate that they just couldn't keep up with the service. I think a balance is important, you want the smallest package to be enough for a simple project, and you want to offer perks that might interest people beyond just getting more space, like automatic back ups and the possibility to contact them to restore if needed.
Even if we are talking about free service you cannot just offer garbage. One thing I've seen overlooked is customer service. It is not wrong to prioritize paying customers, but the way you treat people with the lowest plans will set the tone. People looking for free alternatives can be newcomers too afraid to commit their money because they know they don't know much. They will become your word of mouth.
I think if you see it as a waste of resources then it will most likely be, so only offer something like that if you feel it worth your time and you believe in what you are offering, otherwise sounds like a waste of time and resources for the host and the potential client.