An offer that generous most certainly will burn a hole in a webhosts pocket. I myself on rare occasions will maybe give away free hosting to 2 individuals with a gig of space. Generally, something I only do for friends or family. When I initially started I was all "Come one, come all" no banners no pop-ups I quickly found that I was merely burning a hole in my pocket and smartened up.
Do keep in mind that downtime generally doesn't mean the individual has bad business practices. This poor fellow could simply be a reseller stuck with a, well...we will say below average host (nice way of putting it).
