I don't know how they are getting away with it, or what negative side effects their may be, but I'm using Hover.com to host some of my domains, and recently setup the apex of my domain as a CNAME there. Their DNS editing tool did not complain at all, and my domain happily resolves via the CNAME assigned.
Here is what Dig shows me for this domain (actual domain obfuscated as mydomain.com):
; <<>> DiG 9.8.3-P1 <<>> mydomain.com
;; global options: +cmd
;; Got answer:
;; ->>HEADER<<- opcode: QUERY, status: NOERROR, id: 2056
;; flags: qr rd ra; QUERY: 1, ANSWER: 3, AUTHORITY: 0, ADDITIONAL: 0
;; QUESTION SECTION:
;mydomain.com. IN A
;; ANSWER SECTION:
mydomain.com. 394 IN CNAME myapp.parseapp.com.
myapp.parseapp.com. 300 IN CNAME parseapp.com.
parseapp.com. 60 IN A 54.243.93.102