I only heard about co.cc sub domains like six months ago via a good friend.and they are....oops were fully responsible for making on average $1600 a month and my sales were growing. Who knows the real reason Google got rid of them, but I know that I was ranking higher than many .com, .nets, .info's etc. It seems like the biggest beneficiaries will be companies like godaddy, 1&1, namecheap, etc.
I feel sorry for people who have used .co.cc sub domains years before me. It is not right that all of their hard work came abruptly to an end and they will now be coerced to buying domains way more expensive while losing their serps.
I have read the report here on the percentage of spam from free domains. I'm sure the percentage of spam from free sub domain services are higher than paid no doubt. But honestly, I have been around the net for some time doing internet marketing, and I have not heard nor have I seen .co.cc websites till it was brought to my attention.
I will be so bold to say if you ask the general population if they know about the co.cc spams or even got any, I would guess that the majority of internet users have never heard of them either nor consider them to be a threat. I have personally seen more junk from .info's
Most online users don't host forums nor see a .co.cc site and freak out, because they have probably never seen this ghostly threat. So the spam issue is a lame issue IMO.Companies just don't want to see anything free where they see a chance to make revenue.