Summary: Encryption doesn't solve all security problems. In many cases you need authentication and integrity, not secrecy, and encryption can be the wrong tool for the job. In those cases you need a Message Authentication Code, not encryption.
It's pretty typical to see embedded system designers use encryption to solve security problems. And it's also common for that to be the wrong answer to the real problem.
To understand why, consider a simplistic security need. (This example is naive in many ways, but serves to illustrate a point.) Let's say you want to set a light bulb intensity to one of 256 levels, and you want to make sure that only an authorized person can set that level. To do this with no security, you'd send a message on an embedded network to that light bulb:
Message = BulbLevel (where BulbLevel is an 8 bit unsigned integer)
OK, so now you want to encrypt things. You compute X = Encrypt(BulbLevel) with a shared secret key that only you and the light bulb know and send that in the message:
Encrypted Message = X (still 8 bits)
Now there is no way for anyone to know what level you've sent -- you've accomplished secrecy. (Ignore all those attacks that just came into your head, such as recording past messages and playing them back .. or peeking to see what the light bulb did when it received the message ... this is just an illustrative example.) But is secrecy what you really wanted? Remember our goal in this example wasn't to keep it a secret what the level was, but rather to prevent someone unauthorized from setting the light bulb level.
What if an adversary just sent random garbage:
Encrypted Message = RANDOM_8_bits (still 8 bits)
That would set the light bulb output to some value. Maybe not a desired value, but the attacker would be able to change the light value to something other than what you commanded without knowing the secret key, (with probability 255/256 that it wasn't a repeat of the value already there) which is what you're trying to prevent.
The issue is that encryption is the wrong tool for the job. What you really want is some combination of authentication (I know the right person sent it) and integrity (I know the contents have not been altered). Encryption isn't the best tool for this -- what you want is a Message Authentication Code (MAC). One way to get this is to compute an appropriately chosen secure hash function and append its results to the message:
Authenticated Message = BulbLevel | SecureHash (8 bits concatenated with a hash value)
Both you and the light bulb still have a shared secret key with this approach. The light bulb receiving the message computes its own hash of the BulbLevel value and compares it to the received SecureHash value in the message. If they match, the message is authentic and it takes action. If they don't match, then it is a forgery and the message is ignored. Note that the BulbLevel isn't a secret -- it's transmitted "in the clear." That's because the point of this isn't secrecy; it's authentication (the sender knows the secret key to the cryptographic hash function) and integrity (the hash matches the value expected from the BulbLevel value, so the message hasn't been tampered with). If the hash value is sufficiently large, the chance of someone guessing the right hash value for a maliciously sent bulb level is low enough to be tolerated or even virtually impossible given the lifetime of the lightbulb, providing an arbitrarily good probabilistic level of security.
There's another important benefit to using a MAC. Encryption for the purpose of keeping data secret tends to be export controlled. Message Authentication Codes tend not to be export controlled. So ditching encryption in favor of a MAC usually helps with export issues. (Read the rules and talk to your lawyer -- this is just a sweeping generalization.)
The overall message is: if you want to ensure authenticity and integrity and secrecy isn't a big deal, using encryption is barking up the wrong tree.
The fine print: OK, now for those who have begun composing comments about how naive the above schemes are ... yes, I know .. it was only an example. You don't actually do it that way for either approach. For example, you need a time stamp or something to prevent playback attacks. And that tends to help encryption do better because of the reduced chance of accidentally coming up with a plausible decrypted timestamp value (if the receiver is checking for plausible timestamps). And certainly encryption can be made to work if you are careful. But, when I've looked into this for real systems what I've found is that a MAC is often a better tradeoff for a number of reasons and tends to provide better authentication and integrity for a given computational cost and bandwidth cost in practical scenarios. And, I've found designs in the real world based on encryption that weren't going to work as well as the designers thought because they didn't get the details of authentication right. Also, just to make sure it's said ... a CRC is not cryptographically secure, so don't use it as a secure hash function.
Even after the fine print, the message remains: use a MAC if it does the job. Don't jump to a default strategy of encryption if secrecy isn't what you really need. And if you do decide to use encryption, make sure it is really providing authentication and integrity checking in addition to secrecy.