The Linux-libre Wikipedia entry sums it up pretty well:

“According to the Free Software Foundation Latin America, Linux-libre is a modified version of the Linux kernel that contains no binary blobs, obfuscated code, or code released under proprietary licenses.[7] In the Linux kernel, they are mostly used for proprietary firmware images. While generally redistributable, binary blobs do not give the user the freedom to audit, modify, or, consequently, redistribute their modified versions. The GNU Project keeps Linux-libre in synchronization with the mainline Linux kernel.[8]”

Basically; some stuff in the kernel is either not free or not open but is included for convenience.