We find some users using the embed content feature expect the link created to point to the file download instead of the description page. I can see users expecting both ways, which is why WordPress gives users the option to do either (or no link).
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I think what would suffice is an intermediate step, after selecting the image, in which the user set embedding preference: size of the image (original being an option), the link URL (or none), alt/title text, and the align value. I don't think we need to get into captioning or duplicate WP's full image editing feature set.