There is nothing wrong with multiple free distributions. In particular if
there is a good reason for it. In some cases it gives the community the
opportunity to test certain features. Other distributions then implement
those features when they become more stable and easy to implement.
A good example of this was knoppix. There was a distribution before that too
which got things rolling although died. Now all distributions are "live" and
can be used without installation.
There are some privacy enhancing distributions too for instance. Some of
these distributions are so strict that the majority of users would never be
able to use them. Some of the features though may one day make it into the
mainstream distributions. There are some ones I would love to see added. For
instance the Tor project releases anonymity enhancing software thats included
in some distributions in addition to other stricter features like apparmor
(developed by yet other projects). Some main stream distributions include
limited versions of apparmor. Others include SELinux.
