<"My Dad has threatened to go on this diet, so I was reading about it. One thing I notice is that -- despite all the fats and protein, it ends up with a caloric deficit (therefore, weight loss) -- so why not just do it by restricting calories and exercising?"
Tada! Finally, someone notices the myth of the Atkins machine. You are consuming less total calories daily, even though you are eating those "bad" fatty foods. The problem is, the Atkins way encourages an unhealthy lifestyle. All fats are NOT equal. Eating foods high in saturated fats, which the Atkins Diet encourages and promotes, is putting you on your way to an early grave. Stick to the good, unsaturated (healthy) fats found in nuts, olive oil, peanut butter (natural), etc.>
First part of the above, it has been no secret that you are calorie restricted on Atkins. Proteins take longer to digest than carbs, if you fill your gut with protein it will stay full much longer that it will with pasta. Eating protein/fat also avoids the sugar rush that causes the insulin rush that leads to being hungry an hour after you eat. Fat sends a signal to the brain that there is no need to be hungry, this also helps curb an appetite.
Part two. Atkins doesnt encourage eating bad fats, not in the way you portray it. If I remember correctly, he simply does not discourage it unless you are not follwing his diet. His claim is something like if you are not in ketosis, the fats become harmfull. Which if you understand what happes when in ketosis, it makes sense. When in ketosis, you burn fat for fuel, since you are in calorie deficit, you will burn all fat you take in and then some. That is why after a bout 9-12 weeks your cholesterol levels plummet.