If CanadaPost was to give away the boxes, people would be grabbing them for whatever purpose they need and not for shipping with CanadaPost. That's why they decided to charge S/H. I pay 70c for a 1/4 mailer to Uline, so it's still a decent price for 3 boxes even if you would not use them for flat rate purpose but buy regular expedited parcel or small packet service.
Useless box size
I disagree, the box size 8.5 x 11" will fit magazines and many small products, I would consider USPS cube size quite less useful than this.
However, the pricing could have been better. I understand CanadaPost is less flexible unionized over-bureacratic corporation with 50k employees, so someone has to pay their wages. Until they restructulize, we will not see any pricing slash.
All in all, this service is comparable to existing services, no better, no worse. It has it's advantages for both shippers and CanadaPost and disadvantages too. I will use it where appropriate, but it's definitely not a "Horay!" type of thing.