It isn't Ecuadorian territory, it's still British territory. UK law allows the UK to declare that it won't abide by the convention that embassies enjoy special legal status in law.

Presumably Ecuador could respond in kind.

It may well be that the wonderful British police or SAS could smoothly extract Assange, however, what happens if the not so wonderful Ecuadorian authorities decided to lay some sort of siege to the British Embassy in Ecuador? Are British authorities really prepared to risk that?

If Ecuador did that, the British would simply leave peaceably. I'm not understanding the risk you refer to -- would not Ecuadorians be equally hindered by the lack of a British Embassy as the British?

Well then, if that was the case then Assange could just as well peacefully with the rest of the Ecuadorian delegation.

Don't forget that Assange is not and asylum "seeker" anymore, but that he has in fact been granted asylum. In other words, under international law, he is and Ecuadorian Citizen and unless Britain decides to transgress International Law and effectively declare war on Ecuador, no amount of sabre rattling will amount to anything at all.