The Linux device is compelling when speed (and ease) of development is important, scale is low, or the market is insensitive to pricing. Not to mention the added bonus of more processing power. On the other hand a traditional microcontroller is still compelling where volumes are high or there are strict real-time concerns.
As an embedded software engineer, I'm watching closely. Personally I'm reaching up to higher languages like Python to make myself more attractive in an industry that I see moving toward more Linux devices.