the problem is (as you wrote) 'supposed to be verified out-of-band'.
for some less technical people, even verifying the signature is a huge
step.
i am a fan of providing easy accessible security and using already
existing infrastructure. (in case of the dom0 repo, an ultimately
trusted source).
I'm weary of calling the dom0 repo an ultimately trusted source, as it implies 
trust in all the related infrastructure (DNS, CAs, etc.) Package managers 
follow a trusted objects model. Each package's signature is verified before 
installing, meaning trust of the repo is not required.

ok, i was a bit imprecise.
i meant: packages loaded and verified (via signatures) from the repo for dom0 can be considered ultimately trusted.

if one of the installed packages of the dom0 repo is compromised, we have an attacker in do0 and it is game-over.
so we can assume these packages are ultimately trusted.

In either case however, a signing key must be distributed in such a fashion 
that it can be verified and, as such, Im not sure if this offers anything other 
than a wrapper around the signature verification step.

if you distribute the key with the os and it is living in dom0, it can only be changed by someone in dom0 -> game-over so: if the key is compromised, you cant trust anything on this machine either it was somehow compromised during usage, or it was compromised from the beginning (via a compromised installation image)

if the key is in dom0 and you want to verify it over a different channel, you can load it into some vm and do this there.

the wrapper-function to download and check images is just convenience for a non-technical user.

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