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Engine braking is not bad for the transmission, clutch or engine. It doesn't add any significant friction wear and since the power stroke is eliminated, the most demanding energy load on the engine is gone as well.
What engine breaking does, though, is make it possible for the fuel injection to shut off completely, which means that the engine doesn't consume any fuel at all, as opposed to when it's running on idle while coasting. It also, as you pointed out, save the brakes.
Engine breaking is highly recommended.
Edit: As a matter of fact, since there's no combustion going on, and fresh cool air gets sucked into the cylinders, it also helps cooling the engine.
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