This is kind of a nitpick, but Ethernet _does_ bother with encryption, at least in recent versions of its standards. Obviously Ethernet has a long history and this is all optional, but it's pretty straightforward to set up 802.1X / MACsec (+MKA) on a LAN in such a way that all traffic is encrypted at L2.
I've never heard of this being used with really low-power embedded stuff, but if you stretch your definition of embedded to the point where you include things running stripped down Linux, this is a pretty viable setup if you have those devices distributed across a LAN with a managed switch in the middle.
I've never heard of this being used with really low-power embedded stuff, but if you stretch your definition of embedded to the point where you include things running stripped down Linux, this is a pretty viable setup if you have those devices distributed across a LAN with a managed switch in the middle.