governments and companies like Facebook and Google are going about installing free WiFi nodes even in developing countries like India.
Risks and dangers are not binary, just because something have risks associated with it, does not mean that you immediately shouldn't be using it at all. You have to understand the motives and incentives of people to understand why government and companies provides free public Wi-Fi and why people uses them.
Motives of governments
For government, having an internet educated population is a benefit. There are people who believes that internet should be a human right and government providing free internet is no different or is a part of government providing free education.
Risks to governments
There's really very little risks for governments to provide free public internet, except the cost of building the infrastructure and other opportunity cost of where else they could have spent the tax payer money.
On the flip side
Many people thinks the government is a powerful entity, too powerful. The Government running free internet that can be used by everyone means they can monitor how people are using the Internet, track people's movement, etc. However, this is NOT their risk to take, people who don't like the terms for a government's free wifi are free to not use the service. It is not a disincentive for the government not to provide free wifi.
Motives of Companies
As always, companies are profit driven. Companies can profit from providing free internet from several ways. Google have a huge advertising presence all over around the Internet and they also make money of providing many paid Internet services and infrastructure. For a company as gigantic as Google, they don't even need you to use their services to indirectly profit by your presence in the Internet. The more people is in the Internet, the more valuable the Internet becomes and the more money that Google makes from providing related services that many businesses uses that you might have used.
Coffee shops, grocery stores, shopping centres, and other such physical stores don't make money of providing free internet directly, but they profit from people visiting their location. If people are scheduling a meetup in a their shop instead of a competitor because they provide free wifi, that's a money well spent, as these people likely will be ordering something on the menu as well.
Risks to companies
When you provide a free public internet, you take on the risk that people will be abusing the service by using too much data or downloading illegal materials or other illegal purpose. Companies take on the first risk by limiting the amount of "free" internet that they provide in a single session. While it's true that a free internet cannot be truly limited without shutting down the service for everyone else (you can just reregister, use a different device, or spoof any identifying information), for most people this stumbling block is high enough that it's easier to just hop on another free wifi rather than trying to find a way around a specific provider's limitations. For the second risk, many countries have some sort of safe harbor rules where in some circumstances wifi provider's aren't held responsible for actions of their users.
On the flip side
For most companies that monitor the usage of the free wifi, they usually do these monitoring to protect their own interests, rather than because they're interested in your personal data. In countries where safe harbor are not as clear cut, or where it requires some action from them to attempt to control what's coming from their network, companies have incentives to monitor the traffic going through their free internet to ensure it's not being used for abusive purposes.
Some companies may also try to profit (or recover some of the expenses) of providing free internet by adding or replacing ads on pages passing through their public wifi with their own ads. There are also some who may try to profit by selling user tracking data, but these are not an easy money, adding tracking system or ads injecting also incurs many infrastructure costs and issues, and in many cases it's just not worthwhile as they already profit from your coffee purchase anyway.
Motives of people
Especially in developing world, internet access can be a sizable expense compared to your income. If you can reduce your mobile data usage by connecting to free wifis, that can add up to significant savings. Savings that can be used for other activities that matters more for them. Many people are uneducated about the risks of public Wi-Fi, but it doesn't mean that there's no safe way to use free public wifi. Even knowing the risks of public Wi-Fi, I don't necessarily discourage people from taking advantage of them, provided they take some steps to control their risks.
Risks to people
Apart from risks that I've outlined above about user tracking and such, users also have risks from the behavior of other users. Public Wi-Fi are often configured with little regards for network security, so it may be possible for one user to snoop into the traffic of other users. Businesses that sets up open wifi often don't care about this risk, primarily because this risk are not on them. They're not the one to lose if someone let lose a Firesheep on the network. As a security conscious user, there are several ways you can modify various aspect of this risk, such as by using a VPN, by accessing only sites that uses HTTPS, by refraining from certain activities on the public wifi, etc.
On the flip side
Ultimately for the user it's all about cost and benefit. Often the risks of using public Wi-Fi is just an abstract risk, and using them in that particular moment can be beneficial for various reasons. Everyone have different priorities and different risk profile, even if a large number of people believes that they shouldn't ever be using public Wi-Fi, there is always a much larger number of people that believes the risks are acceptable.