It's pure idiocy to not take advantage of the ability to have your code merged in, and condemns your customers to not only having to build their own kernels or use ones you provide, but keeps them stuck with old kernel versions.
Right... there's a quite a mess in the embedded world with a lot of device makers stuck on bug-ridden, horribly hacked-up 2.4 kernels. In particular, the execrably unhelpful Broadcom has never released any open-source drivers for its WiFi chipsets, and no binary drivers for 2.6.x kernels (except recently for x86).
Microsoft just doesn't "get" the way Linux works. It's kind of astonishing that even the developers responsible for writing Linux kernel code there haven't figured out the value of cooperating with the kernel team. Well... maybe they have and the suits overruled them. Hard to say.