Indeed it is difficult to define embedded system. Just like it is not easy to differentiate between CPU and MCU. Has 8051 ever considered as CPU? It has CPU core for sure. What about ARM? It is an embedded system. Oh! Really? I thought it is a CPU.
I heard this one from the great Irish comic Dave Allen (paraphrased from memory):
One evening, a junior member of a club was listening to the club's oldest member tell of his great adventures hunting lions in Africa.
Oldest member (with gestures): I saw the lion ahead in the tall grass, up wind. I crawled through the grass on my hands and knees to get closer to get a better shot. Suddenly the lion was right in front of me! He stood up on his hind legs and went ROAAAAARRRRR!!!! [Oldest member waves hands wildly in air while roaring.]
Junior member (astonished): Good God, sir! What happened?
Oldest Member (suddenly pensive): I fouled me britches.
Junior member: I'm not surprised, sir.
Oldest member: I don't mean then -- I mean just now when I went ROAAAAARRRRR!!!!
This debate topic reminds me of the story I heard about a reporter who was interviewing Louis Armstrong and asked him "What is Jazz?" His immortal reply: "Lady, if you don't know by now you'd better not mess with it."