I kind of feel like Resig is misunderstanding what embrace and extend usually mean. (Or at least, glossing over it.)
I kind of imagine it more like that Java debacle where Microsoft installed a version of Java but never updated it, severely retarding the growth of the language and basically killing off the "original" web application sphere...
In Microsoft's case, their strategy was "embrace, extend, and extinguish". I doubt Microsoft wants to "extinguish" jQuery. Why would they care? jQuery isn't a threat.
I kind of imagine it more like that Java debacle where Microsoft installed a version of Java but never updated it, severely retarding the growth of the language and basically killing off the "original" web application sphere...