Yep, that's it! I'm just talking about a generalization of the concept here, not implying that there are physical dipoles aligning with the field in a vacuum (because then you would have to ask what the field would look like "outside" of the vacuum, which is not a concept). But just what you said -- if you have a field, say from a dipole, the field propagates through the vacuum, and the shape that the field lines take (curvature, and extent) depends on the vacuum polarizability. You can see that IF you could change epsilon, you can make the field lines shrink or expand just like you would if you were inside of a dielectric. So the value that we choose (e0) is the value in the dimensionality system of our choice that expresses the true value of the fields everywhere. Maybe in a different universe that value is something different! But in our universe it is what it is...