The main problem with allowing embedding of arbitrary code is security. Unlike a CMS where you have a single, or small group of trusted admins adding content on a site, a social network allows anybody to add content. This means that this content must be screened more aggressively for potentially harmful code. That is why you can't just copy/paste embed code. With various plugins you can add content as it provides some provider-specific validation. If you have your own provider that can be trusted, you can have a dev add some parsing rules to allow embedding of that content using the embed_extender plugin. The Veeplay plugin allows you to upload video directly to your Elgg site and if it's encoded properly will play in jwplayer.
I've modified both of these plugins to work together so that you can even embed video you uploaded through veeplay in any elgg content that's parsed by embed_extender.
See:
http://community.elgg.org/plugins/868269/1.8.3.3a/veeplay
http://community.elgg.org/plugins/787632/1.8.3/embed-extender
My versions:
Leggy very difficult for new user .
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