Having had this conversation multiple times with many different people I'm already familiar with the arguments this takes and have already commented on Rowak's criticisms in the link that Gary posted above. If you're curious to understand the logic and evidence that I use to base my own approach to teaching embouchure you can learn about it there. I'm hesitant to go any further because this discussion is now framed in such a way that for me to try to defend my viewpoint I can't help but be seen to be criticizing Rowak's teaching. As I know nothing about Rowak other than what I've read lurking on this forum I don't think I have enough information to even speculate about why he and I have very different teaching experiences.
Which brings us back to the OP's original question. Frankly, I think any discussion of the vermillion is completely arbitrary and shouldn't even come up with regards to embouchure. There's no physiological reason why it's wrong and the variation of size and shape from player to player is so wide as to make any sort of recommendation for placement based on it arbitrary. The actual issue that this comes down to is that some players will play better with more lower lip inside the mouthpiece and as this embouchure type functions in some key different ways from the other more common embouchure types, many teachers don't understand how to best help these players.
As far as successful players who place on the red, it is not so common but not completely unheard of either. Again, if you go to the link Gary posted above you can see some images and some links and references to other resources that show this.
Conversations like this tend to go into a false dichotomy, and I hope no one misunderstands the points I'm trying to make. There are frequently times when moving a player's placement around can help enormously, I just don't think the red of the lips is a good reason to consider in this case. Place the mouthpiece where it works best and then develop embouchure strength and control - in conjunction with working on efficient breathing, tonguing, expressive playing, etc.
Best of luck to the OP.