This is a speciality (or bug) in the Xen xm stack. Network (vif) definitions can have a type=ioemu argument to indicate the device should be emulated. In fact it does create an emulated device and a paravirt device for anything but type=netfront. Then the guest will unplug the emulated device if it can handle a pv device.
The code currently does have a special case when the vif definition does not specify a model, but the same is required for definitions for anything but netfront. Otherwise the emulated device is not functional after the emulated one gets unplugged.
I tested the attached change on my precise xen host and with e1000 as model. Before the change hypervisor default (which already omitted the type=ioemu) would work but e1000 came up without working network (MAC address all 0). After the change the e1000 case worked as well.
Unfortunately forgot the "closes", so it hasn't been automatically set to fix released.