Okay, I've moved the thread to the Lua Code Discussion forum, locked it, and added a huge red note at the top stating that it's old, to hopefully forestall people trying to reply to it or open new thread about it. Same link as above.
The original function of embeds.xml was not to interface with packagers or updaters that deleted its contents. Rather, it was discovered that referencing nonexistent files in a TOC file significantly increases loading time, whereas referencing nonexistent files in an XML file does not. Thus, anything that would be nonexistent in a standalone-library system was referenced in the XML file, not in the TOC.
Later, the WowAce packager was modified to remove the contents of the embeds.xml file to go one step further and eliminate errors in FrameXML.log for posterity's sake.
Now, as previously mentioned, the CurseForge packager (which is now used on WowAce also) recognizes special comments in TOC, XML, and Lua files (much like Internet Explorer's [ifie] conditional comments) that can be used to mark library files that won't exist in non-embedded packages. However, if you're not hosting your addon on CurseForge/WowAce, using embeds.xml is still a good idea to help out those of us who delete the embedded libraries. :)