Yes, there potentially a difference between development repositories and release repositories. Development repositories get updated much more frequently, and have a lower standard for what is allowed to go in.
This said, it may well be easy to use the same technology for both. At the least, the same image seems likely to want to pull from both releases and local developments, and so it is important to allow them to be used in the same image.
Additionally, there is likely to be a notion of internal development versus real releases. This is something different from Debian, where almost all software has an outside development infrastructure. Again, though, it may be easy to use the same technology for both. Making a "release" could simply be a matter of pushing a copy of the package entry out from a local repository to one that is used more widely--much like people can pick particular MCZ files on SqueakSource to publish to SqueakMap.
As far as I know, Avi's characterization of local projects is correct. To mention two specific examples:
1. I don't think Scratch is using any of the public servers right now. They have thrown up their hands and are basing their work on some 2.x image.
2. The Georgia Tech group has some software maintained locally. I guess they could post it publically, and sometimes I toy with the idea of doing so. It seems really strange, though, to post code on SqueakSource or SqueakMap which has hard-coded pointers to our internal servers, even though this code is not really secret.
The GT group has 6-7 "developers" per semester (though the development is extemely light), with a quickly revolving set of people. I don't know how many people work on Scratch, but I'd guess that it's about the size Avi is talking about.
I don't know of anyone actually using Squeak for something that is really, truly secret. We might imagine, though, that people might one day build commercial services in Squeak. So while it is nice to support truly private servers, it may not be a pressing need right now. (Though it's hard to say; it may be a good question for squeak-dev -- tell us your secret commercial program you are hatching. :))
Oh, one final note. www.apt-get.org lists many hundreds of separate apt repositories for Debian. It seems that if this feature is available, then people will use it heavily, for whatever various reasons.
-Lex