Also, if you have a very large submodule repository, it won't inflate the size of the repository that contains it.
To respond to the comment about this being useful for private keys: if this is the case, does this also mean unauthorized users will not be able to checkout the submodule at all? Or will they just get a copy of the files (which would not make sense with private keys).
You seem to be very knowledgeable about subtree, so I'll ask a question you can hopefully answer:
I have multiple repositories each having 100,000-500,000 files, all relating to the same project. The reason I broke them up to multiple projects is that the git index doesn't handle millions of files all that well (e.g. index gets rewritten on every modification). Would subtree help me here in any way?
Of course, this is not a usual way to use git, and Facebook opted for switching to Mercurial when faced with a similar problem (though an order of magnitude or two larger, I'm sure).
submodules work for me now, but they are very clunky -- but the reason I didn't even try switching was the crypto signing of commits, which is apparently not a problem. Would subtrees help me with the scale as well in any way?
But I think for your use case you're probably stuck with submodules.