It's currently possible to set CNAME and MX records for domain names on free hosting. For a basic website, these settings are enough. However, many external services expect you to configure TXT records as well. Email service providers demand you configure SPF and DKIM (which are TXT records) and certain domain validations (like Google Webmasters) prefer TXT records as well.
I think TXT records would be a very useful addition to free hosting accounts.