1. It's a freeroll. Yes you said you were already in the money, but at that point $500 is way more than $20, so both of you are shooting for the same thing. At that point, I'd gladly take a coin flip with a $20 already guaranteed, and if I win a better shot at taking down a higher prize.
2. I don't think the best he can hope for is a coin flip. If you're shoving at this point what you actually want is to steal. I've seen people in tourneys (I do low stakes, not freerolls, but nothing over $10 entry fee) shove with Ax or a low pocket. Unless you have AA-QQ I'd happily call with JJ, because I'm a slight favorite, and if you have Ax or 22-TT I obviously love my odds.
3. Would you really shove with AA-QQ? Most people would especially slowplay AA or KK and let the other person make the move, so that's even more reason to call. If I'm in that situation in a tournament and I see JJ, unless I'm facing someone who's been only playing monsters, and playing them extremely aggressively (which is pretty stupid if you think about it, you steal blinds when you get monsters, otherwise you fold), I'd make the call there. Obviously it depends on chip stacks, and if I'm near the middle and several more are about to bust (meaning I make more money if I just last a few more rounds) I'd be more inclined to fold there. But especially if I'm short or big stack here, I make that call almost instantly. Not that you did the wrong thing. Most of the time you'll be able to pick up the blinds, and if a pocket calls you have a good shot of winning. Additionally you may get calls from AQ and possibly AJ, and if you're playing against a really bad opponent you could get calls from KQ-KT, maybe even mid to high suited connectors (89-QK).