In principle, this is true, but i have to disagree with certain parts. Under certain conditions (guys looking to recoup value, middle-tier talent with upside and certain imports). It's very possible to find free agent bargains: Guys like Adrian Beltre when he signed with the Sox; Joe Nathan last year with the Rangers; Hideki Okajima; Russell Martin (who was coming off a bad year offensively, but C is a D first position, and that was not in question); Wei-yin Chen and Bartolo Colon even with the PED bust.
The constant here is risk. If you take risks on players with questions marks, you create the possibility of finding significant production for insignificant cost. In big FA contracts you usually pay for "certainty" in production, or the lack of risk, when ironically, there is no such thing as "certainty" or "lack of risk" in baseball.