The free accounts are quite limited in several areas. http://www.cityofheroes.com/news/freedo ... oices.html
Free players cannot join supergroups, they don't have in-game mail, the forums are read-only, and you only get 2 character-slots. Also, the use of the auction-houses are limited, and you have to purchase access to the Mission Architect, and Inventions.
The Free 2 Play model is a great choice for people wishing to try the game, or for extremely casual players. Many of those who pay 2 play, or paid in the past, would find the restrictions to be limiting. On the other hand, the Pay 2 Play crowd will get a lot of additional features that should make the game that much more interesting and fun.