Many embedded systems applications do not require a desktop environment or graphical interface on the screen (e.g. server), and you may want to only install the files you really need on the SD card either to reserve as much space as possible for data and/or your program or to reduce costs.
After searching for a minimal image based on Raspbian ARMHF distribution for the Raspberry, I could only find Linux Systems minimal image based on the Alpha version of the Raspbian Wheezy. Their compressed image is 109 MB in size, has a custom kernel, sshd and ntpd are enabled, but the wireless tools were deleted, and at the time the swap was located in another partition instead of a file inside the rootfs. The uncompress rootfs is about 414 MB (as reported by df -h when mounted as a loop device).