Freeform chargen is all I ever used, for the exact reason that balance is a silly concept in a simulationist game (yet another example of cdda's internal dissonance). I wanted to play a specific character, derived from a narrative I made up on the spot. I should be given the freedom to select whatever traits or skills I feel are representative of that character.
The issue with the current system, as I remember, is that for any given trait or skill, the effects are not obvious to someone new to the game. The names of traits have very little to do with the numbers they affect, since the effects are decided arbitrarily by the developers. So one persons interpretation of 'bad back' might be very different from anothers. It's a big issue for roleplayers where a certain trait sounds like it would make perfect sense for a character's backstory, but in practice the trait is negligible or affects some unrelated aspect of gameplay.
To summarize, chargen as an act of roleplay is difficult when there is disagreement between the language of the player and the language of the developer. For new players especially, it makes it tough to design and play characters that feel right. The redesign seems to acknowledge this, but also suggest putting a cap on points, which is a mistake IMO.