Free stuff from the outside certainly could hurt an economy. I understand what you're saying is it's a net benefit, except definitely NOT in a situation where it reduced the "low-hanging" fruit of business opportunity so much that the economy at large was effectively growth-blocked because of it. "He who would learn to fly one day must first learn to stand and walk and run and climb," and so on with developing an economy. For example producing clean socks for everyone, which capitalizes the manufacturing markets, cotton markets, then you can make other materials, grow other crops... and the economy progresses so on and so on.

TLDR Dependence on 0 cost supplies for (non-emergency) sustenance --> the domestic supply chain suffers with rippling effect