How not to sell embedded Linux

You are right that it's better to start from an embedded distribution 
when building an embedded device. The only problem with this approach is 
that the software of a typical embedded device has to be supported during 
ten years or more, while MontaVista and WindRiver typically support each 
version of their own distributions during only two or three years. This 
means that if you want to benefit from their support, after this time you 
are forced to upgrade everything (kernel, glibc, gcc, ...). Such an 
upgrade can be very expensive because of all the retesting work it 
implies.