would avrdue -e option destory an arduino chip

Is there anyone else using arduino in this way who has their own little library of C code set up st everything required is just uploaded each time?

Um, that's pretty much what I use arduino for. They have done a good job of trimming down the usual huge mass of libraries to a useful core... I won't necessarily use the IDE for editing, don't care much about the C++ extensions, and like the convenience of being able to plug the board directly into a USB port without messing with a programmer board/dongle/etc (my other programmer is a STK500, which can be pretty painful.)
Why are you so resistant to using the arduino libraries?