This request is a follow-up after issue 937 http://subversion.tigris.org/issues/show_bug.cgi?id=937 File externals are introduced in subversion 1.6, however only for intra-repository file externals. Inter-repository file externals are not supported. In my organization we use tools that expect libraries to be available in the same directory. When using libraries from different SVN repositories, it is required to add file externals. Directory externals won't work because they add a directory level to the current directory. Additionally, we don't want to pull all libraries from an external repository into all our projects, only the libraries those projects need.
Original issue reported by fschop