I frequenlty hear this phrase being used, to include in many television commercials. Shouldn’t the word “for” be dropped? After all, when something is available at no cost it’s available “free,” not “for free.” The “for” seems to imply you’re giving up something, which if truly free, you are not.
That and it is usually a lie. Most of the “free” stuff that is advertised is just bundled with a purchase.
“Stupid” is totally subjective. It’s stupid if you want it be.
Is it wrong? Idioms are never wrong.
It is good usage? Not particularly, but the context doesn’t require good usage, it requires usage that moves the product. If this works, then it’s good and not at all stupid.
Does it work? Beats me.
I think ‘We will give you this free’ does not sound right. Though it works in some promotional blurb, for example ‘buy one get one free’.
Is ‘pay nothing’ stupid? I think there’s a psychological element behind statements like that. It’s sort of like, ‘what do you give us? Nothing!’ There is probably a subconscious expectation that after ‘pay’ there will be a price, and the ‘nothing’ is almost like a surprise. Not sure how to explain my thoughts better than that though.
There are many redundant and logically inaccurate words that we use in sentences every day and don’t realise it. Generally, it’s not so much whether it makes grammatical sense or logical sense, is whether it has aesthetic value or familiarity.
IMHO “for” is superfluous. Used in slogans and promotional stuff it may serve a purpose, either metrically or otherwise. Commercials are not noted for grammar correctness. You may recall the old cigarette commercial that a certain cigarette “tastes good as a cigarette should.” “As” is grammatically incorrect (“like” is the correct connection), but, hey, it’s a catchy slogan.
However, I’ve also seen this used in newspapers and formal prose. It may be an idiom, but I don’t think it should be used in formal prose. It has, however, become so commonplace that I catch myself using it. 
BTW, somebody once complained to James J. Kilpatrick, the cumudgeon who once wrote political columns and then limited himself to grammar columns, holding himself out as an expert in grammar. He’s written a couple of books on grammar. He saw nothing wrong with the usage. (Apparently he used it himself. He once attempted to justify the usage “I felt well.”) He recently had his 89th birthdate. Wish him a belated happy birthday.
Totally the other way around. The slogan was “Winston tastes good like a cigarette should” and people complained it should be as.
See Wiki for details.
When I was in 2nd grade we followed along as the teacher read a book. I don’t remember the name of it, but it involved a young foreign (French?) boy who somehow got to the U.S. and was trying to… do something. (Make a life for himself? Get to his uncle’s place on the West Coast? Something.) I remember there was one character named ‘Dud’. I remember because the teacher kept pronouncing ‘Dud’ as ‘Dude’. (I still remember her hesitation the first time she read the name.) I also remember that the kid was happy that apple pie and a glass of milk were cheap, and that he claimed you could get all of the vitamins you need out of that combination.
In any case, one thing the kid learned was that in America things were not ‘free’. They were ‘for free’.
So since 2nd grade I’ve tried to avoid ‘for’ free.
:o (After I posted this, I realized I had switched the words. Winston, according to the commercial, is not like a good cigarette, but is a good cigarette.)
If it makes the meaning clearer, it’s not stupid. Anybody got any specific examples where it does (or does not) do this.
However, I’m pretty sure that anyone who uses the phrase “free gift” is a weasel.
“Free gift” can be used to differentiate an item that is included free as an inducement for purchase. That is not a gift. “For” in “for free” is superfluous, but James J. Kilpatrick maintains that some superfluous words or redundancies are not bad, if used for emphasis, meter, or any time he thinks so.
“You can have this car for X.”
“Twenty thousand dollars” and “free” both fit fine in that sentence, don’t they?
Wow. So Kilpatrick thinks the same thing as every other person who has ever commented correctly on the English language?
Good for him. I suppose. 
To my thinking “For Free” implies something that normally costs but you’re getting this time with no cost.
This would be oppsoed to Air to breathe if free, or Butterflies are free. In otherwords it’s there for your use or enjoyment with no cost ever.
I realize this is just the way I look at it though.
Usage questions aside, “for” most certainly does not imply you’re giving up something. By that logic, we should deem “I got something for nothing” stupid as well and recast it as “I got something nothing”, which of course sounds ridiculous. I simply want to point out that trying to justify your usage tastes on the basis of logic is a very dangerous path.
“For Free” is not technically correct. As the OP said, something is either “free” or in exchange “For Nothing”
However, its been used long enough that it is now acceptable use - thus accpted as grammatically correct.