That's my guess and that of others I've read messages from, but it should be noted that the regulations don't require that the STBs provided be "free".
My guess at this point is that the fee for one STB will be permanently included in the basic fee (the regulated lifeline cable fee). Including the STB puts upward pressure on this fee, which franchising authorities often try to deliberately place below cost-of-service. By including the STB (even for those few customers who won't have some sort of digital device rental from the cable company), it may help make up for this unfairness on the part of franchising authorities. At least that's my thinking.
I do believe most MSOs will charge for a second digital device right out of the gate.
That's not true. The cost of increasing bandwidth to hubs is substantially less than increasing bandwidth from hubs to homes. Therefore, it doesn't make sense to pass the analog straight to customers. It makes most sense to pack 10 analog channels converted to digital on one QAM channel.