There's something to be said for being able to boot linux and access its device drivers, openssl, console access over ssh, scripting languages, etc, no fuss.
To get it up and running there is little fuss, to keep it updated and running automa(g)(t)ically at the customer and guarantee 10 years of support there can be a lot of fuss.
Were you planning on keeping your 100% hard-coded firmware updated as well? Linux can be a pain in the ass, I get it, but some of the things that are a pain are things that embedded folks just skip altogether. You make a connected device you have opened yourself to vulnerability, and it will need to be maintain, full stop. Now, you could make a good argument that less code means less bugs, with which I agree. But this person is heading in the direction of a full networking stack, modern and complete crypto, etc. Might be less code to do without Linux baggage, but I slight prefer my odds with the well-trodden drivers and OS.
I think most of the work with embedding linux is creating your own 'distro' with every single thing you do not need stripped out. That's a boatload of work.
I've worked in the IoT space and lived the pain. My general sense is that the solutions right now for developers suck. You basically can turn over the keys to a platform company (and pay in perpetuity and be limited to what they thought was a worth doing), roll your own platform, or throw a proper OS on there. I don't like any of those options. And those are the same options and essentially the same complexity if you want to flip a few bits occasionally over the cloud, or you want to complex interactions and streaming Gb of data. Rolling your own, by the way, I find particularly unpleasant for a startup because you end up investing big time and money in "generic" plumbing that has nothing to do with your company's mission.
I think the option I would like to see is an OS _for_ IoT. Cut down, minimal, and, if it implements simpler (but still secure) network protocols, I'm all for that. I'll be happy to do the server-side work to talk.