Remember there are 3 brakes in your car, handbrake, foot brake and engine braking.
Engine braking (jake braking) by trucks is illegal by statue in many cities and towns because it's very loud. Also, engine braking is riskier in terms of costs (stresses to drivetrain, torque converter, transmission, engine) than brake pads, so people aren't going to do it. Furthermore, they rarely have the skills or transmission to be able to do it conveniently. In addition, if it were more efficient or safer, it would likely be a feature, but I've never seen it in a standard transmission passenger vehicle.
I assume you mean the engine break in a manual tranmission car (AKA stick shift in the US). But that relies on your clutch, which is still a friction based mechanism. Admittedly if you're breaking you're probably going to change gear either way, but the amount of friction depends on the difference in revs between the two parts coming into contact, which is presumably going to be larger if you're using it to engine break. So it seems to me that you're reducing wear on your brake pad but just switching that to increase wear on your clutch - with similar effects on air quality.
Engine braking happens because engines have very high internal resistance - with motorcycles for example, there's no parking brake, you just leave it in 1st gear and it will not roll. So when you're not on the throttle, the inertia of the wheels/drivetrain will keep the car moving and the engine RPMs from dropping to idle instantly, but over time the engine will drain that inertial energy and slow down the car.
Also, engine braking is pretty weak on modern manual cars AFAIK. At least in my Honda Civic it basically doesn't engine brake, compared to my motorcycle. The effect is there but very minor.