It's hard for a freeware developer to create something that can get known well enough to make money, which is why most simply give up and charge flat out for their underdeveloped project that ultimately fades into obscurity.
Cave Story is far from obscure, and it's free. For years it's been free. And the only revenue that comes from it is the Wii Ware adaption made specifically because it's just so popular that people are willing to pay money to play it on the TV.
But popularity doesn't make a game. It takes the heart of the developers, or in this case developer. Cave Story is that rare type of game that was developed entirely by one person: "Pixel". He spent years perfecting this 2D shooter, and does it show?
Well, pretty much yeah. If you like 2D shooters at all, you'll like Cave Story (unless you only like "Hardcore" games, and don't actually know how to get to the Hell level). The style of Pixel's work is a unique blend of a dystopian future and a fantasy cave-exploration setting, which sounds like an odd marriage but works quite well. As far as game plot goes, you're a white guy with a gun in a cave full of rabbits, and you've got to figure out the rest on your own. Maybe it doesn't appeal to everyone to have a mysterious plot, but you could actually consider this a pretty good story with just a few text-heavy moments, most of which are interwoven into gameplay. Through it, you get the sense of a deeper world, outside the game, and not just the Earth as you might know it, either.
Cave Story plays like you'd expect, and explains how to play on the title screen. Z is jump, x is shoot, arrows move. Down enters doors, which is a bit unintuitive, and jumping physics in the game take some getting used to, but with a bit of adjustment, players will find that it's simple but elegant control. Oh, and there are weapons. Lots and lots of weapons from standard gun to machine gun to rolling fireballs and some weird contrivances that make your experience unique depending on your gun-choosing tactics.
Is Cave Story earning the popularity it has on the internet? Well, if you like Metroid, Megaman, Castlevania, or pretty much any other 2D game of yore, you'll probably fall in love with Cave Story.