I guess the issue here is how complex is the project – how much media do you have and is that media still growing and how many editors are working on that same media.
With a (relatively) small project, with all the media available, then your method of keeping all the proxies in the Library works fine. With a larger project, shared between more than one editor, and in which additional footage is coming in on a weekly basis, then the option to store proxies externally is very welcome.
You end up both with a small ‘trimmed’ Library which is easy to share with other editors and assistants over a network (copying hundreds of GBs is not an option) and an external proxy folder which can grow as more footage is imported into the master Library.
Up until 10.1.2 this worked by using a remote disk with the same name as the main storage disk and then updating the proxies on the remote disk as they came in. The updated remote Library would then be ‘fooled’ into thinking nothing had changed and relink correctly with the proxies. For some reason this no longer appears to work in 10.1.3. (anyone else noticed this???)
Proxy workflow has been greatly improved in recent updates, now all that’s needed is a way to directly relink proxies in the same way as original media – and a whole new range of extended workflows would be supported.