There's also the data layer vs data ACCESS layer vs Business Layer argument. Embedding SQL calls just screws up the separation in my mind. It's not always a valid argument IMO, but it's kind of a big hammer when you discuss best practices.

Also - assuming you actually have a DBA role - you're undercutting the "specialist" and any optimization they might be able to provide by not putting the code in a place they can access. I mean - your devs don't REALLY want the DBA monkeying with their code? Well - in order to do their part of the job, the DBA's would kind of HAVE to if the SQL code isn't up to snuff. And the code would have to be recompiled and redeployed, just to fix SQL performance. That in itself is a costly scenario.