I'm not Duncan, but I'll give my perspective on this.

The API will get versioned due to the nature of cabal packages and having more access would be helpful for tools like cabal-dev. In an ideal world cabal-dev would/will go away, but other tools that build on cabal-install might appear in the future. The risk of using the cabal-install modules as a library is that the API of cabal-install should be allowed to change freely between versions, potentially causing breakages in downstream tools. I think if that risk is understood by consumers of the API then it's actually really valuable to have that level of access to the internals.

Basically, I'm +1 on making all of cabal-install into a library.

Jason