How are the two mutually exclusive? There's no technical reason I can think of that Intel couldn't separate the "initialize" and "management" functions of ME.

How are the two mutually exclusive? There's no technical reason I can think of that Intel couldn't separate the "initialize" and "management" functions of ME. If an OS is installed, it has rights to write into the "management" storage area, remove everything there, or install alternative functionality. If no OS is installed, and remote features like power-off-network-login need to work, have the NIC jump straight into the storage area and start executing. If there's nothing there / corrupt data because the OS / user screwed it up... well, that's their fault. There's no non-DRM case for precluding users from being able to overwrite the ME of their own hardware.