I think sitouts are fine on the whole. If you've tried posting and folding from the outset to see where you come in a freeroll, generally you don't get that close to the money, although in some (like the 32red 9:45 $1000 freeroll), if you build up your stack to perhaps 5000 chips, then you may be able to then post and fold into the money, which would make the all-in, and then post/fold if you get lucky approach possible.
Most freerolls don't pay enough places for the number of entrants for even this to work - you'd have to play for a while to build up a good stack of chips, and then (having played well so far) decide to just abandon your shot at the much juicier top places in favour of just placing barely in the money.
In the occasional SitnGo it's more funny, though, when you get someone posting and folding, and the other players are aggressive enough that they end up in the money. The thing is, if you regularly get to the money, then even these players are good, because there's no way they can win, so it gives you a better shot at 1st.
With the other tournaments, where players have bought in and are just sitting out, then they've contributed money to the pot, but aren't likely to get anything back except in the most loose, aggressive games, so they're just making it more money in the prize pool.
I'd not considered the positional advantage related to the sit-outs, though - it is interesting to think that it effectively gives you the button extra times, so you have a nice positional advantage... if you're still mainly playing the cards rather than playing positional advantages, then that won't mean so much to you (except for the occasional free set of blinds when everyone else passes), but if you do play position, then it would help you more if they're in the right place...