Looks like it's become the "mainstream" implementation since last time I looked.
Honestly, I don't see much gain in using something like this in "production". After you hack something together, carrying a PC around with it isn't comfortable[1].
It may be useful for prototyping, but the arduino IDE is pretty good by itself. I have never actually needed a GPIO firmware. But it's there.
[1] In my 3D printer, that I really couldn't get away with it, I plugged a rPI with a wifi module so it can stay far away. I have a project where I will need a PCIe bus, this one bothers me.
Oh, that's a nicer one than the others I found. I see that sort of thing as being useful in situations where the PC is required anyway, like a lot of automated lab setups. You need the PC for data acquisition and analysis, and it's nice if you can control the rest of the equipment from the same program. I've used Measurement Computing's digital IO and data acquisition boards for that sort of thing.
Having a separate microcontroller has its uses too, of course. Like you said, it certainly packages smaller. Plus, you can get much more reliable timing. I'm currently helping a friend with an antenna rotator project, and that requires some brains right at the motor/encoder unit. For that I've written some software to reliably send control data packets back and forth, which is necessary but adds quite a bit of complexity.
