FreeStuff items were originally hosted offsite, then suddenly it changed and everything now has to be hosted by Renderosity (which is using Amazon's S3 cloud).

The contention is about there being no choice to host freebie items author's own sites or elsewhere.
I doubt that most of those who expressed a desire to have Renderosity host items were wanting for it to be anything other than a convenient alternative to using their own website or other hosting services (e.g. ShareCG).