I'm wondering how does this work in a world of plugins? (for example Windows/oSX world, where programs like Autodesk 3DSMax/Maya, Adobe Photoshop, etc. use plugins)? Or applications that embed many utils into one?
There have been actual exploits (multiple ones!) in file(1), where a bug in parsing can result in arbitrary code execution. That's really a failing of the permissions model: file(1) is a program that does nothing but read a file and print a result, so buggy parsing code should have a failure mode no worse than either it crashing, or printing the wrong result. But as-is, since it has the full permissions of the user who ran it, it can do things like email someone your SSH keys, or delete your home directory, which is functionality the binary clearly doesn't need access to for legitimate operation.