I've never really understood why people get so fancy with their setups when you can just plop a git repo into your home directory. I suspect it has to do with people being unfamiliar with git.

Git works until you need conditional logic such as platform-specific files or templating.

For me it's useful to have a separate directory with my dotfiles repo, since my dotfiles repo's top level directory doesn't correspond to my home directory. I have one subdirectory for each machine.