Rascalboy, you'd better come over and let my gelding know that sidereins create a hollowed back and tension through the neck... and that that lunging in general causes tension.
He lunges beautifully in sidereins. Sidereins provide a contact for the horse - if they are at a level under saddle, of understanding how to work into a contact, then side reins are very beneficial - if you know how to use them. Lunged with no contact, a horse will often run out through the outside shoulder, drop the inside shoulder, counter bend and/or flex, become crooked and also 'leg movers'.
Add some light contact, and you'll find a well trained horse with a well trained lunger, will immediately seek that contact, swing the back, come straight, and in correct bend and flexion. We're not asking a horse on the lunge to work on a square with tight corners, so thats an invalid argument.
Horses for courses - I ride dressage horses, and work them as such. If you're a pleasure rider or don't require your horse to work freely over the back and develop pushing power into a contact, then obviously you're going to have differing methods.
Free lunging I find good to use occassionally for the horse to have a bit of a play. Otherwise I prefer to work the horse as I would expect it to work under saddle. Into a contact, over its back and travelling straight.