See the inline comment in /etc/init/libvirt-bin.conf.

Evidently, this is the way to do things in Upstart world...

** Changed in: libvirt (Ubuntu)
   Importance: Undecided => Wishlist

** Changed in: libvirt (Ubuntu)
       Status: New => Triaged

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Libvirt-bin ignores libvirtd_opts from /etc/default
https://bugs.launchpad.net/bugs/557054
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