Free childrens' books is a market for lemons.
People keep good childrens' books.
They pass them along within families.
Or just leave them in their nostalgia drawer.
The free books are crap because they are the crap that people want to get rid of...no fond memories of reading time (because they are crap).
Finally, if a good childrens' book winds up on the free shelf, someone grabs it sooner rather than later.