Free tracks really do devalue the pay tracks, just as cheap tracks devalue expensive ones. Ask a bunch of owners of both RB and GH which game they buy DLC for and the response will overwhelmingly be "Rock Band". Why? Value. RB gives you more play options for a cheaper price. Without RB as a comparison, those same people would actually buy some GH DLC. The same thing will happen if GH moves toward a "free, sponsored tracks" model, it will devalue the $2 Rock Band tracks.
Specificly speaking to the $1 Christmas tracks. I bought all 5 of them and had some fun with them. I also didn't buy anymore tracks in January because $2 felt like too much comparatively. In February I finally picked up some tracks again, as the $1 price had faded from memory. The next time I go and look at tracks, now that I have been reminded of the $1 price, I probably won't grab any because they are too expensive again. The consumer's mind is very fickle that way.
Not only did the $1 tracks cost Harmonix $10 from me on January, but it is probably going to cost them $10 from me this month now as well. Like I said, devalued.