Embedded means a lot of different things to a lot of different people. Embedded can range from a pacemaker to consumer electronics, and obviously there are quite different markets with different constraints attached to these.
My daily work is in consumer electronics, which is very much BOM (Bill Of Material) driven. Any hardware costs that can be reduced by smart software, is a big gain. This is also the problem with a generic OS as Linux in this market, it means that device manufacturers often end up having to maintain lots of optimisation patches themselfs, unable to feed them back.