Question: I was debating with my students this week about which software to submit their files in for my package design class. A few advantages of InDesign I see are as follow:

* The capability of creating mixed swatches with Pantones.
* The ability to customize the links panels so I can see right away which files and in what color mode and resolution, etc.
* Better type management, and in many languages.
* Getting a warning if I have overset text.
* Possibility of lowering the display performance if the file is heavy

After checking opinions on a few forums, it seems Illustrator is the preferred choice for package design. I've also freelanced in an agency specialized in package design and all their stuff was in Illustrator but after discussing, this seems to have been due to habit and the investment it would have required to switch everything to InDesign... 

Am I missing something that makes the industry prefer Illustrator over InDesign? What would be the pros and cons of using Illustrator vs. InDesign for package design?

Answer: 
Some printers require files to be submitted in Illustrator format, so ultimately it will come down to vendor requirements. However, I think of Illustrator and Photoshop as tools to generate layout resources, and InDesign as the best way to efficiently assemble those resources. Illustrator is great for creating the die cut and score template as well as all of the vector-based assets, but it is weak in areas where InDesign excels. Unless your vendor states otherwise, there is no reason not to get the most out of both platforms.
I've worked at as an in-house designer for a publisher with it's own very large press, as well as a designer and art director for larger agencies, creating work for international clients (coke, mcdonalds, lipton), and I think you are spot on in your assessment of the programs & their use. 

* Illustrator is excellent for vectors, which is what printers are all about, but sucks at handling raster images.
* Photoshop isn't ideal for print stuff, but people accomodate it due to it's widespread use as the #1 design program.
* Indesign isn't a great creation tool, but does a great job at consolidating color profiles, keeping working vectors & laying out images. It's especially great for packaging because it's masters allow the creation of templates for consistency across product labels.
	+ I've actually experienced situations where printers prefer illustrator exclusively because of the preflight plugins for it. Realistically, its more laziness because they can just as easily make any prepress adjustments off an appropriately exported PDF.